Using Exemptions to Protect Your Wages From Garnishment

Learn how to protect some or all of your wages from garnishment with a state exemption or how to stop a garnishment entirely by filing for bankruptcy.

If you receive a notice of a wage garnishment order, you might be able to protect or exempt some or all of your wages by filing an exemption claim with the court. You can also stop most garnishments by filing for bankruptcy. Your state’s exemption laws determine the amount of income you’ll be able to keep.

What Is a Wage Garnishment?

Most creditors can’t garnish your wages without first getting a money judgment against you. The creditor must sue you in court and then either win its case or get a default judgment. The court will give the creditor a default judgment if you don’t respond to the lawsuit.

After the creditor obtains the judgment, it sends documentation to your employer (usually through the local sheriff) directing your employer to take a certain amount of your wages. 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 don’t have to go through the court system to obtain a wage garnishment. Instead, they’re afforded certain collection rights by statute.

(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 wages from creditors to pay for living expenses.

Each state has a set of exemption laws you can use to protect your wages. Depending on your situation, you might be able to partially or fully protect your income.

Some types of wages are fully exempt (although exceptions exist). Generally speaking, ordinary creditors cannot garnish the following types of income:

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

Wages, however, are almost always subject to garnishment unless you can claim an exemption of some sort. Lower income debtors might be able to keep all of their wages. Higher earners will likely lose a portion of their income.

(Learn more in 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.

Suppose that you find out that your wages have been garnished after receiving a paycheck that was 25% short of what you normally bring home. 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 issuing the order allowing the garnishment. The judge will determine if you qualify for that particular exemption. If you do, the garnishment amount will be reduced or eliminated (depending on what your state law says).

How to File a Claim of Exemption

Before you can protect income, you must file a claim of exemption by filing a document with the court that issued the underlying garnishment order.

Most courts will have a form for you to fill out. You’ll include:

  • your name
  • the name of the creditor suing you, and
  • the case number.

You’ll also describe the exemption that will allow you to keep the greatest amount of your wages and provide any other required information, such as proof of your dependents. You’ll file the completed 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 should plan on attending this hearing.

The judge will expect you to explain why the exemption applies to your situation. If the judge agrees, the creditor will be ordered to reduce or stop garnishing your wages. If the judge disagrees, your wages 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—and you don’t need to worry about losing everything you own.

Property exemptions apply to more than just wages. Each state has a list of exemptions that a filer can use to protect property needed to maintain a home and employment, such as furniture, clothing, and a modest car. You’ll find the assets listed in each state’s exemption statutes. If you own an asset that appears on the list, you can exempt it.

Property not covered is nonexempt. Here’s what happens to nonexempt property in the two primary chapter types:

  • Chapter 7 bankruptcy. 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.
  • Chapter 13 bankruptcy. You can keep your nonexempt property, but you’ll have to pay the creditors its value (and possibly additional amounts) through a three- to five-year repayment plan. The rule is that you must pay either your disposable income or the value of your nonexempt property in your plan, whichever is greater.

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 the otherwise exempt property.

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