Changes to Indiana Wage Garnishment Law

Effective July 1, 2014, Indiana enacted new limits on wage garnishments. Old Indiana Wage Garnishment Limits Previously, Indiana law tracked federal wage garnishment limits.

Effective July 1, 2014, Indiana enacted new limits on wage garnishments.

Old Indiana Wage Garnishment Limits

Previously, Indiana law tracked federal wage garnishment limits. That meant that a judgment creditor could garnish only the following amounts from an individual’s paycheck:

The lesser of:

  • 25% of the individual’s disposable earnings for the week, or
  • the amount by which the individual’s disposable earnings for the week exceed 30 times the federal minimum wage.

New Indiana Wage Garnishment Limits

The new Indiana law is slightly more generous to debtors than is federal law. Now, if the individual shows good cause why the amount of garnishment should be reduced, the garnishment could be less than 25%, as long as it is at least 10% of the individual’s disposable earnings for the week. Ind. Code Ann. § 24-4.5-5-105. For details, see Indiana Wage Garnishment Limits.

Different Limits for Child Support and Student Loan Debts

Indiana still tracks federal law when it comes to the amount that may be garnished for child support and student loan debts. Those amounts are greater than for other types of debts.