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If you've stopped paying a debt, your creditor could sue you and try to get a judgment from a court. Once this happens, the creditor could request that the court garnish your wages or your bank account to pay back the debt.
If you're already struggling to keep up with your financial obligations, though, a garnishment could make an already bad situation much worse. Fortunately, there are steps you can take to stop a garnishment before it wreaks havoc on your financial situation.
What Is Garnishment?
A garnishment is a tool that debt collectors can turn to if you can't pay back a debt. If approved by a court, the creditor could request that a specific amount be taken from your paychecks or your bank account to pay down the debt over time.
These forced payments can exacerbate your financial hardship and potentially make it difficult to cover your necessary expenses. As a result, it's important to try to avoid garnishment by working with your creditor before they file a lawsuit against you.
If you're past that stage, though, there are some potential options you can consider to get rid of the garnishment.
5 Ways to Stop a Garnishment
If a court has awarded judgment to your creditor and garnishment is part of the plan, here are some potential ways to get rid of it.
1. Pay Off the Debt
If your financial situation is dire, paying off the debt may not be an option. But if you have other ways to come up with the money, eliminating the debt will resolve the need for a garnishment.
For example, you could ask for help from family members or friends or consolidate the debt with another loan. The latter option won't get rid of the debt, but it'll pay off the original debt and essentially press the reset button.
Of course, only consider consolidation if you can actually make the payments on the new loan. Otherwise, you're just delaying the inevitable and can damage your credit score further.
2. Work With Your Creditor
At this point, you may be dealing with a debt collection agency or a law firm instead of the original lender. These agencies or firms typically buy debt for pennies on the dollar, so they may have some wiggle room to work with you.
If a lawsuit is on the table, reach out to the creditor to see if you can come up with a solution that doesn't involve garnishment. For example, you may be able to get set up on a modified payment plan based on your ability to pay.
Alternatively, you can try to settle the debt for less than what you owe. To do this, though, you'll typically need to pay the settlement amount in a lump sum. You can even enlist the help of a debt settlement company or law firm with the negotiations. However, these companies can be risky to your already damaged credit score—and scams are common—so opting for a credit counselor to guide you may be a better option. The National Foundation for Credit Counselors can get you started.
Note, however, that it's best to pursue these options before a garnishment is in place, as they may not be as appealing to creditors as guaranteed court-ordered payments.
3. Challenge the Garnishment
When a court enters a judgment against you, it'll provide you documentation of the order, along with instructions on how to challenge it. Depending on where you live, you may only have a handful of days to file a claim of exemption, so it's important to act fast.
For example, you may be able to challenge the garnishment on the grounds that the debt doesn't belong to you or the amount is incorrect. You can also challenge it if you believe the garnishment is invalid.
4. File a Claim of Exemption
Another way to get rid of the garnishment, or at least reduce it, is to claim that some or all of your income is exempt from the garnishment.
For example, if your income is already being garnished by another order, it could reduce the impact of any new garnishments. Additionally, certain types of income may be exempt from garnishments in general, including alimony, child support, Social Security, retirement and disability income.
In your claim, you can also provide information to show that garnishment would impact your ability to cover necessary expenses and provide for your dependents.
5. File for Bankruptcy
If your financial situation is bad enough that filing for bankruptcy is your only way out, doing so would stop any existing garnishment activities.
Depending on the type of bankruptcy you qualify for, you may be able to get on a restructured payment plan that works with your financial situation, or you may be able to have some of your assets liquidated to pay off some of your debt and have the remainder discharged.
If you're thinking about bankruptcy, though, it's important to consult with a bankruptcy attorney first to determine if it's the right move for you.
How Much of Your Wages Can Be Garnished?
For most consumer debt, the maximum amount that a creditor can garnish from your wages depends on how much you earn.
|Maximum Garnishment by Income|
|Monthly Income||Maximum Garnishment|
|$942.50 or less||None|
|$942.51 to $1,256.65||The amount above $942.51|
|$1,256.66 or more||25% of your wages|
Source: U.S. Department of Labor
However, there are different limits for other types of debt, including:
- Back child support or alimony: Up to 60% (or 50% if you're supporting another spouse or child) of your disposable wages, plus an additional 5% if your payments are more than 12 weeks behind.
- Federal student loans: Up to 15% of your disposable earnings.
- Back taxes: Exempted income is based on your filing status and number of dependents. Use this IRS table for reference.
Work to Rebuild Your Credit After Falling Behind on Debt Payments
If you're facing garnishments to pay back a debt you owe, your credit score may have already taken some heavy damage due to missed payments. While dealing with your garnishment and existing debt is a top priority, it's also important to consider ways to rebuild your credit after you've dealt with your most pressing issue.
With Experian's free credit monitoring service, you'll get access to your FICO® Score☉ and Experian credit report, which you can use to understand which factors impact your credit score and which areas you can address.
You can also take other steps to improve your credit, such as getting and using a secured credit card responsibly, applying for a credit-builder loan or having a family member add you as an authorized user on their credit card.
The rebuilding process can take time, but making it a priority can help you achieve your goal faster and improve your financial situation for years to come.