Debtor and Creditor

When Can a Creditor Garnish Your Wages?

By Cara O'Neill, Attorney
Learn whether a creditor can take wages immediately or must take you to court first.

When you fall behind on a bill, it’s common to wonder whether the company can deduct the past due amount from your wages. Don’t worry. It’s likely that it can’t—at least not right away. Before taking that step, most creditors must bring you to court and get a money judgment against you.

Debt Type Matters

No one can deduct money from your check without first proving that they have the right to garnish your wages. In a few cases, the law will give the creditor that right—but not many. Most creditors must first get a court judgment.

Here are examples of wage garnishment rules for common types of debt:

  • Domestic support obligations. If a family court judge orders you to pay child support, the creditor will likely receive a wage garnishment automatically.
  • Internal Revenue Service (IRS) tax debt. The IRS has the right to demand payment from you. If you fail to pay, it can garnish your wages without taking further steps.
  • Government student loan debt. Falling behind on your government-backed student loan can be costly. If you default on your student loan, the government has the right to make deductions from your earnings without first obtaining a court judgment.
  • Other obligations, such as credit card, utility, or medical debt. If you fall behind on most other types of debt, your creditor must sue you and get a judgment before garnishing your wages (more below in “The Court Process”).

Not all creditors can deduct the same amount from your check. The IRS and a creditor with a domestic support obligation have the ability to take the biggest bite out of your earnings. To learn more, read How Much Money Can a Creditor Garnish From My Paycheck? LINK

What Can an Ordinary Creditor Do?

When you fall behind on a credit card bill or you can’t pay a for your cell phone, gym, or medical services, you’ll likely receive collection calls and notices. As long as the law doesn’t give the creditor an automatic wage garnishment right, and the creditor doesn’t have a judgment, then that’s all the creditor can do. It’s limited to calling and sending you letters requesting payment.

(For more information, see Delinquent Debt: What to Expect in Debt Collection.)

When Will a Creditor File a Lawsuit?

Litigation isn’t cheap—and creditors tend to do their homework—so it’s unlikely that you’ll be sued unless you:

  • owe enough to justify paying attorneys’ fees and litigation costs, and
  • have income or assets the creditor can take to repay the debt.

If you’re served with a lawsuit, you’ll have a short period to respond to the suit. Your state law will determine the exact time. What happens next depends on whether you defend the action.

  • If you don’t respond. The creditor will ask the court to request a default judgment. The judge will likely review the creditor’s documentation proving that you owe the debt and, if satisfied, issue the judgment.
  • If you respond. The matter will move into the “discovery” phase and each side will have the opportunity to ask for evidence from the other. The court will determine the winner after reviewing the case. If the creditor prevails, it will receive a money judgment.

(For more information, read Delinquent Debt Lawsuit: What to Expect When a Creditor Sues You.)

After Receiving the Judgment

A creditor with a money judgment can move forward with a wage garnishment (and other collection techniques). It will start after the sheriff serves your employer with official paperwork. Your company must carry out the garnishment by complying with the laws of your state.

Your employer will likely have to give you a certain amount of notice before starting the garnishment. The short delay provides you with time to file a hardship objection.

(Learn more by reading How Long Does it Take to Garnish Wages After Judgment?)

Stopping the Wage Garnishment

If you’re facing a garnishment, you have several options. For instance, in most states you can:

  • File an objection if the garnishment will cause you or your family an undue hardship.
  • File a claim of exemption if your state allows you to exempt (protect) wages.
  • Pay the full amount that you owe.
  • Negotiate the debt with the creditor (agree to a lesser amount).
  • File for bankruptcy.

Look carefully at your paperwork. It will likely include instructions explaining how to file an objection. If not, contact the sheriff’s department or the self-help department in your local courthouse.

(For more information, read How to Stop a Wage Garnishment.)

Questions for Your Attorney

  • How much notice will I receive before the garnishment goes into effect?
  • Can you negotiate a settlement with the creditor on my behalf?
  • How soon after filing for bankruptcy will the garnishment stop?
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