Asset Protection Asset Protection

Protecting Your Assets

Wage Garnishment

The good news is that the majority of judgment creditors do not use wage garnishment. Again, they have to find out where you work and jump through the hoops to enforce the garnishment. Also, in some states garnishing wages is actually NOT allowed. Check with your state's Attorney General's Office and/or search the Internet for "yourstate wage garnishment law."

Note: all states allow garnishment for child support, alimony, taxes, and federal student loans.

Furthermore, certain types of income are exempt from wage garnishment such as:

  • Social Security
  • Pensions
  • Veteran's benefits
  • Unemployment benefits
  • Public assistance, disability, or worker's compensation benefits

Again, check your state's current laws to determine with certainty whether your income is exempt from wage garnishment.

Unfortunately, once a garnishment levy has been served on your employer they have to comply. However, it stands to reason that your creditor has to find your employer first. Since I know you didn't tell them where you worked (right?), they are going to have to try to find that information somewhere else. Do you know where they find that information 99% of the time? On your credit report. If you want to have that information removed from your report, you will find the necessary tools in the Credit Repair section.

If you find yourself in a wage garnishment situation you still have a few choices:

  1. There may be things you can do to reduce the effect of the garnishment, such as increasing 401K contributions or having more taxes withheld from your paycheck. Talk to a tax professional to learn more.
  2. You can change jobs. Getting another job in-state, or even better, taking an out-of-state job would make it very unlikely the garnishment would follow you. To really make sure, take an out-of-state job in a state that doesn't allow for garnishing wages!
  3. Become self-employed. Garnishing wages for W2 employees is easy. Garnishing wages for 1099 (independent contractors) is difficult.

The last thing to know about wage garnishment is that the maximum amount allowed by state law is in total, not per judgment creditor. Therefore, if you already have a judgment creditor taking 25% of your take-home pay, another one can't garnish your same paycheck. They will just have to get in line.

Note: I have heard of some folks getting a "friendly" judgment creditor to garnish their wages to prevent another "not-so-friendly" judgment creditor from garnishing their wages.

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