If you find yourself hit with a wage garnishment, it’s likely that one of the first questions you’ll ask is, “How long is this garnishment going to last?” That depends on the type of debt, the amount of the judgment (and interest rate), the state you live in, and whether the creditor will take other actions to force payment.
(To learn the basics, start with When Can a Creditor Garnish Your Wages?)
Garnishment Laws Vary Between States
If you have a job, the judgment creditor can ask the court to order your employer to withhold money from your paycheck and send it to the creditor. Federal law usually caps the amount at 25% of your disposable income, which can have an enormous impact on your standard of living.
Every state has a set of laws that govern garnishments, too. Some state laws mirror the federal law exactly, but, some provide you greater protection. Your state might allow garnishments, but not against the head of the household. For instance, Mississippi reduces the percentage withheld to 10% if the garnishee is the head of a family.
Some states allow garnishments for certain debts, like taxes or child support, but not to collect commercial accounts like credit cards. Others don’t allow wage garnishments but will allow the creditor to levy the funds in a bank account after the debtor deposits the paycheck. You’ll want to research the particular law of your state.
You can expect the garnishment to last until you pay the judgment in full. That will include the interest that accrues after the court enters the judgment.
Your state might put a limit on the length of the garnishment. For instance, in Iowa, a garnishment will last only 70 days. In Nevada, a garnishment can’t last longer than 120 days. But, when a garnishment expires, the creditor can file a new one—and the creditor can add the cost of filing the garnishment (attorneys’ fees and court costs) to the owed amount.
If the garnishment started due to a court judgment—as opposed to an IRS, student loan, or child support obligation—the underlying judgment will have an expiration date. That date varies from state to state, but a 10-year life span is typical. When the 10-year mark arrives, the judgment creditor can renew the judgment for another ten-year period. If by some chance the judgment creditor fails to renew the judgment while the garnishment order is active, the garnishment will expire also.
(Learn how a creditor gets a money judgment in Delinquent Debt Lawsuit: What to Expect When a Creditor Sues You.)
If You Leave Your Job
If you find yourself no longer employed, either voluntarily or involuntarily, the wage garnishment will terminate. If you’re thinking about leaving a job to escape the garnishment, it’s unlikely that your plan will work for long. The judgment creditor won’t have much difficulty finding your new employer.
If you move to a state that allows garnishment, the judgment creditor can have the judgment filed in the new state and a new garnishment issued. You might escape the long arm of the judgment creditor if you move to a state that doesn’t allow wage garnishments. But then you may find that the creditor has other collection tools that might be harder to tolerate than a wage garnishment.
If your employer has promised you a severance package, as long as the garnishment hasn’t expired, it will apply to the severance payments, too. However, your retirement accounts are safe from garnishment. Likewise, unemployment benefits are safe, too.
Bankruptcy Will Stop a Garnishment, at Least Temporarily
Filing a bankruptcy case will stop a garnishment. If your debts qualify to get wiped out (discharged) in the bankruptcy case, you won’t have to worry about the garnishment after the case.
Some debts, like child support and back taxes, are nondischargeable. You can pay those debts through a Chapter 13 repayment plan case, but if you file for Chapter 7 bankruptcy, the nondischargeable debt will survive, and the creditor can start garnishing your wages after the matter ends.
In evaluating whether bankruptcy is worthwhile, you should look at your entire financial picture. If you have a significant amount of dischargeable debt, the costs and attorney’s fee can be a worthwhile investment.
Questions for Your Attorney
- If I move to another state, will the garnishment follow me?
- If I change jobs, how long will it take for the judgment creditor to get a new garnishment?
- Can I qualify for bankruptcy?