Short answer: most creditors can garnish your wages only after a court issues a judgment saying you owe the debt (CFPB). Federal law then caps an ordinary garnishment at the lesser of 25% of your disposable earnings or the amount by which they exceed 30 times the federal minimum wage (15 U.S.C. 1673(a)), and your employer may not fire you because your pay is garnished for any one debt (15 U.S.C. 1674(a)). State law can protect more. This is general information, not legal advice.
From missed payments to a judgment
What happens right after a missed payment is covered in missed a personal loan payment. If the creditor or a debt collector sues, the CFPB says to respond by the date in the court papers, yourself or through a lawyer. Responding does not mean you agree you owe the debt, and the collector has to prove the debt to the court. If you do not respond, the court could enter a default judgment, and the CFPB says that, depending on your situation and your state's laws, a judgment may let the creditor garnish your wages, place a lien on your property or move to freeze funds in your bank account (CFPB). A garnishment order generally covers the judgment amount plus additional interest, fees or costs of collection (CFPB).
The federal limit
The limit applies to disposable earnings: the part of your earnings left after amounts required by law to be withheld (15 U.S.C. 1672(b)). The Department of Labor lists those as federal, state and local taxes and your share of Social Security, Medicare and state unemployment insurance tax (DOL Fact Sheet #30). For a weekly paycheck, the cap is the lesser of (15 U.S.C. 1673(a)):
- 25% of your disposable earnings for the week, or
- the amount by which your disposable earnings exceed 30 times the federal minimum wage. At $7.25 an hour (29 U.S.C. 206), that is $217.50 a week.
If your weekly disposable earnings are $217.50 or less, they may not be garnished in any amount (29 CFR 870.10(b)). For other pay periods, the Department of Labor lists the amounts that cannot be garnished as $435.00 every two weeks, $471.25 twice a month and $942.50 a month (DOL Fact Sheet #30).
Worked out on three weekly paychecks
Example only, our calculation, for an ordinary garnishment such as a personal loan judgment, using the rule above.
| Weekly disposable earnings | 25% of earnings | Amount over $217.50 | Most that can be garnished |
|---|---|---|---|
| $200.00 | $50.00 | $0.00 | $0.00 |
| $250.00 | $62.50 | $32.50 | $32.50 |
| $600.00 | $150.00 | $382.50 | $150.00 |
The cap is the lower of the two middle columns. A state law that allows less to be garnished still applies (see below).
Your job and other protections
- Your employer may not fire you because your earnings have been garnished for any one debt (15 U.S.C. 1674(a)). Federal law also leaves in place state laws that bar firing over garnishment for more than one debt (15 U.S.C. 1677).
- The federal limits do not annul state laws that ban garnishment or allow less of it (15 U.S.C. 1677); the Department of Labor says the law that results in less being garnished must be followed (DOL Fact Sheet #30). Your state's rules are not covered on this page.
- The 25% limit does not apply to support orders, certain bankruptcy court orders or debts for state or federal taxes (15 U.S.C. 1673(b)). Some government agencies can garnish without a court order (CFPB).
- Direct-deposited federal benefits such as Social Security have their own bank account protection; see a personal loan on Social Security income.
What you can do
- Answer a lawsuit by the deadline in the court papers, and consult a lawyer (CFPB).
- You may be able to work out a settlement with the collector before a court makes a judgment (CFPB).
- State exemptions may protect some wages or money in a bank account; the CFPB points to LawHelp.org to learn how much your state protects and how to claim exemptions (CFPB).
- If a debt collector contacts you, you have rights about validation, disputes and contact; see your rights with a debt collector. An old debt may be past the time limit to sue; see time-barred loan debt.
This is general information, not legal advice. For your case, talk to a lawyer or a legal aid office.
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Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.
Sources
- CFPB: Can a debt collector take or garnish my wages or benefits?
- CFPB: What should I do if I'm sued by a debt collector or creditor?
- 15 U.S.C. 1672: CCPA Title III definitions (earnings, disposable earnings, garnishment)
- 15 U.S.C. 1673: restriction on garnishment
- 15 U.S.C. 1674: restriction on discharge from employment by reason of garnishment
- 15 U.S.C. 1677: effect on State laws
- 29 U.S.C. 206(a)(1): federal minimum wage ($7.25 an hour)
- 29 CFR 870.10: maximum part of disposable earnings subject to garnishment
- U.S. Department of Labor, Wage and Hour Division: Fact Sheet #30, Wage Garnishment Protections of the Consumer Credit Protection Act (December 2024)