Using Exemptions to Protect Your Wages From Garnishment

You might be able to protect some or all of your wages from garnishment with a state exemption or stop a garnishment entirely by filing for bankruptcy. Learn about the steps you'll need to take to protect your income. You can either ask for a state court to reduce a garnishment at a hearing or wipe out most garnishments by filing for Chapter 7 or Chapter 13 bankruptcy.

If you receive a wage garnishment order or other notice of a wage garnishment, you might be able to protect some or all of your wages or income from the garnishment by using exemptions. You can also stop a garnishment—and protect some of your income—by filing for bankruptcy. The amount of income you’ll be able to protect varies by state.

What Is a Wage Garnishment?

Most creditors cannot garnish your wages without first getting a money judgment against you. This means the creditor must sue you in court and then either win its case or else get a default judgment (which it gets if you don’t respond to the lawsuit).

After the creditor obtains the judgment, it sends documentation to your employer directing your employer to take a certain amount of your wages and send that money directly to the creditor. You must take action to prevent the initial garnishment or address it if it has already started by claiming an exemption with the court.

The creditor will continue to garnish your wages until you pay the debt in full or take some measure to stop the garnishment, such as by filing for bankruptcy (see below).

Creditors that hold debts like taxes, student loans, alimony, and child support usually do not have to go through the court system to obtain a garnishment of your wages.

(To learn more, see If Your Wages Are Garnished: Your Rights.)

Wage Garnishment Exemptions

Wage garnishment exemptions are a form of wage protection that prevents the garnishing creditor from taking certain kinds of income or more than a certain amount of your wages. The idea is that citizens should be able to protect some of their wages from creditors in order to pay for living expenses. Accordingly, each state’s laws provide you with various exemptions that you may use to protect your wages.

Depending on your situation, you might be able to partially or fully protect your income. Generally speaking, ordinary creditors cannot garnish the following types of income:

  • social security
  • disability
  • retirement
  • child support, and
  • alimony.

Exceptions do apply to this rule, usually for garnishment of federal taxes or student loans in delinquent or past due status.

Wages, however, are almost always subject to garnishment unless you can claim an exemption of some sort. (To learn more about how exemptions work, see Protecting Your Property With Exemptions.)

How a Wage Exemption Works

Here's an example of how you might use an exemption to protect a portion of your wages from garnishment:

You receive a paycheck that was 25% short of what you normally bring home and come to find out that you’ve been garnished. You provide more than 50% of the support for a dependent in your care. Your state has a “head of household” exemption which reduces the amount of garnishment allowed in this situation. You fill out a claim of exemption form stating why you believe that exemption applies to you and file it with the court from which the garnishment originated. The judge will determine if you qualify for that particular exemption. If you do, the garnishment amount will be reduced or totally eliminated (depending on what your state law says).

How to File a Claim of Exemption

In order to take advantage of your state’s exemptions, you must file a claim of exemption. You do this by filing a document with the court that issued the underlying garnishment order.

The document will include your name, the name of the creditor suing you, and the case number. You should then specifically describe the type of exemption that you think applies to you that will allow you to keep the greatest amount of your wages. You need to file this document with the clerk of court office in the county where the garnishment originated.

Depending on your state’s laws, a hearing will probably be scheduled. You will receive notice of the hearing in the mail and you should plan on attending this hearing. At this hearing, the judge will expect you to explain why the exemption applies to your situation. If the judge agrees, he or she will order the creditor to reduce or stop garnishing your wages. If the judge disagrees, you will continue to be garnished.

To learn more about garnishment, see Wage Garnishments and Attachments.

Stop a Wage Garnishment by Filing for Bankruptcy

Bankruptcy works well to stop most wage garnishments in their tracks. If you’re worried that you’ll lose everything, you’re not alone. Many people worry that they’ll lose all of their property if they file for bankruptcy. But that’s not the case.

The term “exempt” also refers to property that a bankruptcy filer can keep after filing a Chapter 7 or Chapter 13 bankruptcy. The exempt property will likely include assets that the filer will need to maintain employment and a household, such as furniture, clothing, and a modest car.

But exempting property isn’t simply a matter of selecting any property of your choosing. Each state has the authority to determine which assets its citizens need to work and live. These assets get listed in each state’s exemption statutes (and yes, in most cases, these are the same exemption statutes that you’d use to protect your wages from a garnishment). If you own an asset that appears on the list, you can exempt it. Any remaining property will be nonexempt.

In a Chapter 7 case, the bankruptcy trustee—an official selected by the court to oversee your matter—will sell any nonexempt property and distribute the proceeds to your creditors. In a Chapter 13 case, you can keep your nonexempt property, but you’ll have to pay the creditors its value (and possibly additional amounts) through your three- to five-year repayment plan.

Also, exempting property isn’t automatic. You’ll tell the court about an asset that you’re entitled to keep—including wages—by listing it on Schedule C: The Property You Can Claim as Exempt, one of the official forms that you’ll need to file to start the bankruptcy process. If you fail to do so, you risk losing otherwise exempt property.

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