Creditors can't just seize all of the money in your paycheck. Different rules and legal limits determine how much of your wages can be garnished.
Federal law limits how much creditors, including judgment creditors, can take. Some states have wage garnishment laws that set a lower limit for how much of your wages are subject to garnishment by judgment creditors.
In Illinois, consumer creditors, such as credit card issuers and hospitals, must have a money judgment against you, and even then, can deduct only as much as 15% of your wages. However, some creditors, such as the government, can take a larger amount without first going to court.
A "wage garnishment," sometimes called a "wage attachment," is an order requiring your employer to withhold a certain amount of money from your pay and send it directly to one of your creditors.
Generally, any of your creditors might be able to garnish your wages. 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:
Under federal law, the garnishment amount for judgment creditors 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).
Under Illinois law, the most that a judgment creditor can garnish from your wages is the lesser of the following two amounts:
Some kinds of income aren't subject to wage deductions, like Social Security, Supplemental Security Income (SSI), and unemployment compensation. Talk to a lawyer to find out what other types of income are exempt from wage garnishment in Illinois.
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. A garnishment lawyer can help you identify any mistakes and object to the garnishment.)
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.
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, too.
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).
If you're in default on a federal student loan, the U.S. Department of Education or any entity collecting for this agency can garnish up to 15% of your pay. (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. (Remember, 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 might also be able to garnish your wages to collect unpaid state and local taxes. Contact your state labor department to find out more.
Complying with wage garnishment orders can be a hassle for your employer; some might prefer to terminate your employment rather than comply. Federal law provides some protection for you in this situation.
Under federal law, your employer can't discharge you if you have one wage garnishment. (15 U.S.C. § 1674).
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 stressful. Knowing that some of your earnings will be garnished can lead to frustration 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. File the required form as soon as possible. You might have to go to a hearing, but if you win, a judge might eliminate or reduce the garnishment.
You can often stop 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 wage garnishment laws in Illinois. You can find more information on garnishment in general at the U.S. Department of Labor website.
To get additional information about wage garnishment limits in Illinois, including the procedures that employers must follow in carrying out wage garnishment orders, check out the Illinois Legal Aid website.
For information specific to your situation or to get help objecting to a garnishment, contact a local debt relief attorney.