A "wage garnishment," sometimes called a "wage attachment," is an order requiring your employer to withhold a specific amount of money from your pay and send it directly to one of your creditors. In most cases, a creditor can't garnish your wages without first getting a money judgment from a court. For instance, if you're behind on credit card payments or owe a doctor's bill, those creditors can't garnish your wages unless they sue you and get a judgment.
Some creditors, however, like those you owe taxes, federal student loans, child support, or alimony, don't have to file a suit to get a wage garnishment. These creditors have a statutory right to take money directly out of your paycheck.
But creditors can't seize all of the money in your paycheck. Different rules and legal limits determine how much of your pay can be garnished. Federal law limits how much judgment creditors can take. Some states set a lower limit for how much of your wages are subject to garnishment. Utah wage garnishment laws protect the same amount as the federal wage garnishment laws.
Under federal law, the garnishment amount judgment creditors can take is limited to 25% of your disposable earnings for that week (what's left after mandatory deductions) or the amount by which your disposable earnings for that week exceed 30 times the federal minimum hourly wage, whichever is less. (15 U.S.C. § 1673).
Utah wage garnishment laws are the same as federal law.
In Utah, the most a creditor can garnish from your wages is:
"Disposable earnings" are those wages left after your employer has made deductions required by law.
Creditors who have obtained a court judgment against an individual for unpaid debts can garnish your wages. These garnishments commonly apply to creditors like credit card companies, medical providers, or banks that provide personal loans. Also, you might face a wage garnishment as the result of a court-ordered obligation, like child support or alimony.
In addition, the federal government can garnish wages for outstanding federal debts, including unpaid taxes or defaulted federal student loans. Agencies, including the Internal Revenue Service (IRS) and the U.S. Department of Education, can start wage garnishment proceedings after giving due notice and an opportunity to resolve the debt. However, there are limitations on the percentage of disposable income that can be garnished (see below).
The garnishment process often starts after a creditor gets a judgment in court against a debtor. If a creditor gets a judgment against you, the court will send a notice of a wage garnishment to you and to your employer. The notice tells your employer they must withhold a specific amount of your wages.
The garnishment documents that you received from the court should contain instructions on what you must do to object to the garnishment by claiming exemptions. (You also might be able to object if the wage garnishment was made in error or the creditor failed to follow the law or comply with legal procedures.)
If you don't object or if your objection fails, your employer will start taking money out of your paycheck and sending it to the garnishing creditor.
Generally, any of your creditors might be able to garnish your wages. Again, some creditors must first get a judgment and court order before garnishing wages. Other creditors don't need a court order.
The most common types of debt that may be garnished from your wages include:
In addition to wage garnishment, another way to garnish money is by levying a bank account, subject to some exemptions. Certain money in your bank account is protected from this type of garnishment, for example, two months' worth of certain federal benefits, such as Social Security. So, credit card companies, medical services providers, and other commercial creditors generally can't garnish Social Security and other federal benefits.
However, the federal government can garnish some kinds of federal benefits, like Social Security and Social Security Disability Insurance (SSDI), to recover some debts, like back taxes or defaulted student loan payments.
If you owe child support, federal student loans, or taxes, the government or creditor can garnish your wages without getting a court judgment for that purpose. The amount that can be garnished is different than it is for judgment creditors.
Since 1988, all court orders for child support include an automatic income withholding order. The other parent can also get a wage garnishment order from the court if you get behind in child support payments.
Federal law limits this type of wage garnishment. Up to 50% of your disposable earnings may be garnished to pay child support if you're currently supporting a spouse or a child who isn't the subject of the order. If you aren't supporting a spouse or child, up to 60% of your earnings may be taken. An additional 5% may be taken if you're more than 12 weeks in arrears. (15 U.S.C. § 1673).
Under federal law, the U.S. Department of Education or any entity collecting for this agency can garnish up to 15% of your pay if you're in default on a federal student loan (the same as Utah state law). (20 U.S.C. § 1095a(a)(1)). This kind of garnishment is called an "administrative garnishment."
But you can keep an amount that's equivalent to 30 times the current federal minimum wage per week. (Federal law protects the level of income equal to 30 times the minimum wage per week from garnishment.) (15 U.S.C. § 1673).
The federal government can garnish your wages (called a "levy") if you owe back taxes, even without a court judgment. The weekly exempt amount is based on the total of the taxpayer's standard deduction, and the aggregate amount of the deductions for personal exemptions allowed the taxpayer in the taxable year in which such levy occurs. Then, this total is divided by 52. If you don't verify the standard deduction and how many dependents you would be entitled to claim on your tax return, the IRS bases the amount exempt from levy on the standard deduction for a married person filing separately, with only one personal exemption. (26 U.S.C. § 6334(d)).
States and local governments may also be able to garnish your wages to collect unpaid state and local taxes. Check out the Utah State Tax Commission website to learn more. Click Billing & Payments and Pub 2 Utah Taxpayer Bill of Rights.
Complying with wage garnishment orders can be a hassle for your employer; some might prefer to terminate your employment rather than comply. Federal and sometimes state laws provide some protection for you in this situation.
According to federal law, your employer can't discharge you if you have one wage garnishment. (15 U.S.C. § 1674). Utah law provides the same protection. Under state law, no employer may discharge any employee because the employee's earnings are subject to garnishment in connection with any one judgment. (Utah Code §70C-7-104).
But federal and state law won't protect you if you have more than one wage garnishment order.
The creditor will continue to garnish your wages until the debt is paid off or you take some measure to stop the garnishment, such as claiming an exemption with the court. Your state's exemption laws determine the amount of income you'll be able to keep. Depending on your situation, you might be able to partially or fully keep your money.
You can also potentially stop most garnishments by filing for bankruptcy.
Depending on the type of debt that's being garnished, you might have other options. For example, if the IRS is garnishing your wages because of overdue taxes, you can make a settlement offer (an "offer in compromise") or set up a payment plan.
The most obvious consequence of a wage garnishment is a reduction in your take-home pay. A smaller paycheck can affect your ability to cover basic living expenses, potentially leading to difficulties paying your monthly bills.
Also, while a wage garnishment won't appear on your credit reports, creditors do report delinquent debt to the credit reporting agencies. And the reports can include information about how the debt is being collected, including through a wage garnishment. The missed payments culminating in a wage garnishment and other negative information will generally stay on your credit reports for seven years, affecting your future financial opportunities and potentially hindering your efforts to rebuild your credit.
Beyond the financial strain, the emotional consequences of wage garnishment can be taxing. Knowing that some of your earnings will be garnished can lead to stress and anxiety. Seeking advice from a lawyer and exploring ways to resolve the underlying debt or work out payment terms can lessen some of these pressures.
If you receive a notice of a wage garnishment order, you might be able to protect (exempt) some or all of your wages by filing an exemption claim with the court or raising an objection. The procedures you need to follow to object to a wage garnishment depend on the type of debt that the creditor is trying to collect, as well as the laws of your state. But usually, you must act quickly. You might have to go to a hearing, but if you win, a judge might eliminate or reduce the garnishment.
Again, 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.
Talk to a lawyer to learn more about how you can protect your wages.
Learn about wage garnishments for credit card debt.
Find out if a mortgage company can garnish your wages after foreclosure.
Get information about when a creditor will stop garnishing wages.
This article provides an overview of Utah's wage garnishment laws. To find more information about wage garnishment limits in Utah, including the procedures that employers must follow in carrying out wage garnishment orders, check out the Utah State Courts website.
For information specific to your situation or to get help objecting to a garnishment, contact a local debt relief attorney.