Can debt collectors garnish wages?

Can A Debt Collector Garnish Your Wages

Debt collectors and loan companies may be able to garnish wages, in most scenarios, after they have taken certain legal steps. Whether that can happen will depend on the court’s ruling, and also it will depend on the type of debt. Continue reading to learn more. 

What Is Debt Collection?

When debt is far past due, the creditor may choose to hire or sell your debt to a third-party debt collection agency. All kinds of debt can be transferred to a debt collector, from installment loans and credit card debt to child support and unpaid income taxes. 

In 2021, about 28% of Americans had debt in collections on their credit report.1 Collection accounts are one of the most damaging items you can have on your credit reports, which is why it’s advisable to do everything within your power to prevent your unpaid debt from getting that far. If the entity handling your case has purchased your debt rather than hired, that means the agreement you had with the original creditor no longer exists.

If you have the means, pay off your debt as quickly as you can once it has reached the point of collection to prevent it from getting any worse.

Can A Debt Collector Garnish Your Wages?

Wage garnishment is one of the final steps in the debt-collecting process, and there are many ways you can prevent it from getting to that point. Debt collectors cannot garnish your wages right when they take on your credit account. They may only begin garnishing your wages after they have sued you for non-payment. 

The collector will attempt to contact you repeatedly to remind you of the total debt you owe. They may charge you late fees, raise interest rates, and pester you with incessant phone calls. If the debt still remains unpaid, then these companies may begin a lawsuit against you. 

If the court judgment is in the creditor’s favor, only then can the collector garnish your wages. Even then, federal law has set up restrictions on wage garnishment so that the rights of the borrower are still protected.

What Is Wage Garnishment? 

Wage garnishment means that a portion of the paycheck for each pay period will go directly to the collector until the entirety of the debt has been paid in full. There are weekly restrictions/garnishment limits, and if pay periods cover more than one week, those restrictions will be calculated. The payroll department of your place of employment will have to deduct the money from your paycheck for debt repayment. 

Federal Law Surrounding Wage Garnishment

Federal law on wage garnishment varies depending on the type of debt you owe. Unpaid credit card bills are understandably treated quite differently from unpaid child support. Here is a brief overview of how wage garnishments are handled according to the type of debt owed:

Court Judgments

As stated above, for credit card debt collections to conduct wage garnishment, the credit card company or collector must sue you for non-payment and receive a court judgment in their favor. The creditor can then enter a money judgment against you to begin garnishing your wages. 

Federal law limits the amount that judgment creditors can take in wage garnishments. Wages can be garnished up to 25% of disposable earnings or the amount by which your disposable earnings exceed 30 times the federal minimum wage, whichever is less. 

You are protected by federal or state law against being fired by your employer for having one creditor garnish your wages. However, not every state has protections against retaliation if multiple creditors have a court judgment for wage garnishments.

Federal Student Loans

No court order is required for the U.S. Department of Education or agency working on its behalf to garnish your wages if your federal government student loans are in default

Your wages can be garnished up to 15% of your total monthly income, but you can keep an amount equal to 30 times the federal minimum wage per week.

Child Support and Alimony

Wages can be garnished far more easily for child support or alimony since 1988 with the automatic wage withholding order. 

Child support and alimony payments are usually combined into one with the wage withholding order, but alimony alone won’t result in the automatic withholding order.

Up to 50% of your disposable income can be garnished to pay child support. If you are ordered to maintain health insurance coverage for the child, that will be deducted from your paycheck as well. 

Back Taxes

If you owe unpaid taxes to the Internal Revenue Service, there are very few limits on what they can do to get the money they are owed. 

The IRS doesn’t need a court order before garnishing wages, and you could be left with very little weekly disposable income depending on how many dependents you have and your standard deduction amount.

Protecting Yourself From Garnished Wages During Debt Collection

There is not much you can do to protect yourself from wage garnishment when it comes to child support or back taxes, but you may have some options for dealing with consumer debts. 

The best course of action would be to pay off the debt before a default judgment is made or to prevent your debts from going to collections in the first place. However, sometimes circumstances are dire enough that this is impossible.

Objecting to Wage Garnishment

When a judgment creditor is attempting to garnish your wages, you have the right to raise an objection. The process of objecting to wage garnishment will be different depending on the debt type and your state’s laws. 

If you believe that you have already paid the judgment creditor or that the debt should have been discharged due to bankruptcy, you can state so in a written objection with the proper evidence and paperwork.

Filing For Bankruptcy 

If your debt has gotten so bad that you are in need of profound debt relief, it might be time to talk to a bankruptcy attorney. Although filing for bankruptcy is meant to be a last resort, having debt in collections and possible wage garnishment could be a sign that this step is necessary. 

Bankruptcy can offer debt relief to those who cannot afford to pay what they owe, many unsecured loans can be discharged with the right bankruptcy. American businesses and individuals filed 383,810 bankruptcies in the 2022 fiscal year.2 You can utilize a bankruptcy lawyer referral service to find a local attorney who can help you navigate the process of filing for bankruptcy and handling the collectors in the meantime.

Preventing Debt Collections 

Of course, if you can, the best way to ensure your wages won’t be garnished is to pay off your debt before it is sent to a collection agency. 

Avoid defaulting on a personal loan or credit card, or minimize your debt altogether. Getting out of debt could give you a financial peace of mind you’ve never experienced before. 

Getting Out of Debt

The best advice you could follow to avoid any future debt problems whatsoever would be to pay off your debt entirely or minimize it greatly. Below are some strategies:

Debt Payment StrategyDescription
Create an Emergency FundA financial safety net, helping you cover unexpected expenses without going further into debt. The fund typically consists of 3-6 months’ worth of living expenses.
Avalanche MethodThe avalanche method involves prioritizing debt repayment by tackling the highest-interest debt first while making minimum payments on other debts. 
Use Credit WiselyAvoiding unnecessary purchases and not relying on credit cards to cover everyday expenses. 
Snowball MethodPaying off the smallest debt balances first while making minimum payments on larger debts. 
Debt ConsolidationDebt consolidation involves combining multiple high-interest debts into a single, lower-interest loan, such as a personal loan or balance transfer credit card.
Debt Management PlanA debt management plan (DMP) is a structured repayment program typically offered by credit counseling agencies. 

Keep reading to get more details on a few strategies from the table:

Start An Emergency Fund

The first action you will want to take to ensure that you will be successful in aggressively paying off your debt is to start an emergency fund. You might wonder what creating a savings account has to do with debt. Well, what do people tend to rely on when unexpected expenses pop up? Credit cards or a loan in advance

By saving up an emergency fund before you start paying off your debt, you are making sure that you won’t fall back on your debt by increasing your balances or redirecting the money you are meant to be using on your repayment towards that emergency expense. 

Debt Snowball Method

One of the most popular strategies for debt repayment is called the snowball method. What is great about this method is that it capitalizes on our psychological motivations. The debt snowball has you start off paying extra on your smallest debt while maintaining the minimum payments on your other balances. 

Since you start with the smallest balance, you are likely to pay that off quickly, making you feel accomplished. You roll over that monthly payment on top of the minimum payment for your second-smallest balance. The amount you pay gets larger as you roll on from debt to debt, just like a snowball. 

Use Credit Wisely

Getting out of debt is one thing, but staying out of debt is another entirely. Once you have obtained financial freedom, you want to approach any new debt or credit opportunities responsibly, especially offers from credit card companies. It may take some time to get used to relying on the money you actually have in your bank account instead of credit limits on revolving accounts. 

Keep your balances low and pay them off at each billing cycle if you are able. Doing this will make an enormous difference in your credit score, allowing you access to better financial opportunities.

FAQS on Debt Collection and Wage Garnishments 

Can wage garnishment occur without a court order?

Wage garnishment for government student loans, child support, alimony, and back taxes can occur without a court order. However, for consumer debts like credit card debt, a court order is necessary. The federal agencies involved or state law may dictate the garnishment limits.

If I can make a lump sum payment, can I stop wage garnishment?

Yes, making a lump sum instead of waiting for funds to be collected during every pay period may stop the garnishment, depending on the terms agreed upon with the creditor. It’s advisable to work out a repayment plan to prevent future garnishment situations, especially on credit card debt, which could rapidly escalate with additional charges and high-interest rates.

What types of income are exempt from wage garnishment?

Certain types of income, like Social Security benefits, disability benefits, and some types of pensions, are generally exempt from ordinary wage garnishment. However, they may still be garnished for child support, alimony, federal taxes, and certain other debts.

Key Takeaways From CreditNinja 

It’s imperative to maintain a proactive approach toward managing your debts, which includes timely repayments, keeping a tab on your credit report, and engaging in responsible credit practices. Otherwise, it can lead to collections and sometimes wage garnishment. 

At CreditNinja, we believe that providing individuals with clear, concise, and actionable information empowers them to make informed decisions regarding their financial health.


  1. The Number of Americans with Debt in Collections Fell during the Pandemic to 64 Million | Urban Institute
  2. Bankruptcy in the US: how many companies file for Chapter 7, Chapter 11, and Chapter 13? | USA Facts
  3. If Your Wages Are Garnished: Your Rights | Nolo
  4. Can a Debt Collector Garnish Your Wages? | Crediful
  5. Wage Garnishment Laws: An Overview | All Law
  6. Can Debt Collectors Garnish Your Wages? | Finance Jar

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