How to Stop Wage Garnishment

If you’ve been issued a notice of wage garnishment, you have (a few) options. In all cases, you’ll have to be quick. But above all, you must take action.

Settle or pay the debt

Depending on who’s doing the wage garnishing, you may be able to negotiate a settlement for what’s remaining of your debt. If you can reach an agreement, the wage garnishment won’t proceed.

“It’s a lot more difficult to be successful in that type of negotiation once you’ve reached the point where you’re receiving notice of a garnishment, but you can still try,” says Bruce McClary, a spokesperson for the National Foundation for Credit Counseling.

It also bears mentioning that you can stop a wage garnishment by paying your debt in full.

Challenge the wage garnishment

You can dispute a wage garnishment if too much or the wrong pay is being garnished, it puts you in an unmanageable financial position or you think the garnishment is incorrect.

Consider starting with a written request for debt validation to the creditor, via certified mail with a return receipt. If the debt is verified (or if you skip this step), there are a few ways to challenge it.

Claim an exemption

Wage garnishment laws vary by state, and some states exempt certain situations or types of income from garnishment. In general, non-government creditors can’t touch income from Social Security, disability, child support, alimony or retirement. (Note: The federal government can garnish up to 15% of your Social Security.)

If you think your wages should be exempt, you can file a Claim of Exemption form.

Search “wage garnishment laws” in your state for additional limitations. For instance, a few states prohibit wage garnishment on consumer debts. In some states, heads of household are exempt from wage garnishment. Typically this means you supply more than half of the financial support for a dependent.

Claim financial hardship

If the wage garnishment would prevent you from affording basic necessities like rent or food, you can object on the grounds of undue hardship.

Depending on the type of debt and your state, this may also be a claim of exemption, or there may be instructions in your garnishment notice on how to do this.

Generally you’ll need to complete a form outlining your financial status and include documentation such as pay stubs, tax returns, copies of monthly bills and canceled checks. If you’re dealing with the IRS, there may also be a number to call.

Claim an error

It can be more complicated to challenge a garnishment that you believe is incorrect. Get legal help for the best way to proceed if you've already paid the debt, if it was discharged in a bankruptcy or if it was never yours at all.

You can likely file a claim of exemption to prevent the funds from being garnished, but you’ll still have to address the underlying problem of the mistaken judgment.

Start by writing a letter to the creditor stating that you're not responsible for the debt. List the evidence you have and request that it stop the garnishment proceedings.

The time you have to dispute a garnishment or bank levy judgment is limited, so seek out legal help as soon as you receive the judgment notice.

Consider bankruptcy as a last resort

Bankruptcy is an option, but it’s not something to be casually initiated. Depending on the type of bankruptcy you file, your debt can be wiped out or you’ll be able to create a payment plan. But it has a lasting financial impact.

McClary of the NFCC recommends talking to a credit counseling agency before declaring bankruptcy if you want to get an objective view.

“If you’re filing Chapter 7 or Chapter 13, nonprofit counseling agencies are a part of that process anyway,” McClary says.

If bankruptcy is on the table, it’s worth mentioning to your creditor, who may be willing to take a lesser amount if the alternative is getting nothing.

“It’s a good idea to come at that conversation thoughtfully and rationally and try to work out a settlement if you can,” says Thomas Nitzsche, vice president of public relations for Money Management International, a nonprofit that provides credit counseling and education.

In the end, he says, that can spare your budget and potentially save you some money.

Keep in mind that some types of debt aren’t dischargeable via bankruptcy, including child support, alimony and often tax debt.

Federal student loans can be discharged in bankruptcy but it’s a lengthier process and requires that the court rule in your favor.

What about student loan wage garnishment?

Now that collections have started again on millions of federal student loans, the government can start the wage garnishment process on the student loans in default. If that happens to you, you should receive a 30-day written notice, and you have this window to negotiate a student loan repayment plan or make a written request for a hearing.

If you’re in default, but haven’t received a notice of wage garnishment, your options include rehabilitation or consolidation of your loans.

“If you receive a notice of wage garnishment related to your student loan debt, you shouldn’t let another second go by before reaching out and contacting your servicer,” McClary says.

“They’re the ones who’ll be able to help you take the steps toward avoiding, if possible, the wage garnishment.”

Who can garnish wages without notice?

Some creditors (like the federal government) can claim a wage garnishment without taking you to court, but they still must provide notice. If you default on your student loans, the government must send a notice at least 30 days before the wage garnishment begins.

If you fall behind on your taxes, the IRS must send a final notice of their intent to levy your wages 30 days before it can happen.

Wage garnishment action plan

If you believe you have grounds to challenge the wage garnishment, the paperwork you received notifying you of the judgment will have information about how to proceed, and may also include the forms you should file if you’re challenging the garnishment.

If not, you can generally get these forms at the courthouse that issued the judgment against you, or download from the court’s website. Note how long you have before the garnishment begins. It may be as soon as the first payday after your employer receives the court order or as long as a month.

You can object to the garnishment after this window closes, but you'll lose any diverted income or amount in your bank account in the meantime.

You may be able to retrieve those funds, but only if you declare bankruptcy within 90 days of them being garnished or file a claim for them, which can take weeks to months to resolve.

Detailing the grounds for your objection is the most crucial part of your case. If some or all of your income — such as Social Security — is exempt from garnishment, if you already paid the debt, or if it was discharged in a bankruptcy, you’ll have to back up your claim with paperwork proving it.

How to seek legal advice

Regulations on how to object to a garnishment vary from state to state, so it’s important to talk with an attorney familiar with the laws where you live.

“It’s probably a good idea to at least have an initial consultation with an attorney,” McClary says.

This may be especially helpful if the issue isn’t straightforward — for instance, if you don’t actually owe the debt.

Look for attorneys who have experience in consumer law, debt collection practices or the Fair Debt Collection Practices Act. Some attorneys may offer free or reduced-cost services if you will have trouble paying. You can also check with local legal aid offices or legal clinics to find low- or no-cost services.

Next steps

Objecting to or altering the terms of your garnishment can put you in a better position to reclaim your financial future.

Throughout the garnishment and objection process, however, you can begin to build good financial habits, such as creating and sticking to a budget.