Sometimes an employee doesn’t even know that a creditor is seeking to garnish until they see a change in their paycheck. At that point, you should seek advice of legal counsel. So how much of my paycheck can a creditor garnish?
The garnishment process
Before a creditor can garnish your wages, that creditor must obtain a court order, meaning the creditor must first sue you. Garnishment is the last resort for creditor collection on a debt. In most cases, the creditor has attempted alternative collection efforts prior to litigation. Once a creditor obtains a money judgment against you, garnishment is not far off.
There are three exceptions to the rule that a creditor must first sue you to obtain a garnishment order: child support, taxes, and student loans. State child support enforcement agencies, the IRS and the Department of Education can all garnish wages without a court order.
How much of my paycheck can a creditor garnish?
The Consumer Credit Protection Act limits garnishment to 25 percent of your disposable income and prohibits employers from terminating an employee because of a garnishment. Each state also has its own garnishment laws.
In Washington, D.C., a creditor can garnish up to 25 percent of disposable wages. The garnishment laws of the District of Columbia are contained in D.C. Code § 16-571 through 16-584. The Wage Garnishment Fairness Amendment Act of 2017 (pending) would further limit garnishment in D.C.
by factoring in gross wages and disposable wages. The bill would also effectively exempt altogether minimum wage employees from garnishment.
In Virginia, a creditor may garnish either (a) 25 percent of your disposable earnings or (b) 40 percent of the federal minimum wage, whichever is lower. Garnishments in Virginia must be renewed (the “return date”) every six months. The garnishment laws of Virginia are contained in Va. Code Ann. § 8.01-511.
In Maryland, a creditor may garnish either (a) 25 percent of your disposable earnings or (b) the amount of disposable income exceeds 30 times the federal minimum hourly wage, currently $7.25. Judgments in Maryland are enforceable for 12 years, and they can be renewed. Interest also accrues on judgments in Maryland at the legal rate of up to 10 percent.
The garnishment laws of Maryland are contained in Md. Code 15-601 et seq.
How do I stop garnishment in DC, Virginia or Maryland?
Generally speaking, creditors will not consider settlement of a debt once a garnishment order is in place. The creditor has already gone through the trouble to obtain judgment and garnish your wages. Once deductions commence, the creditor will not stop garnishment voluntarily.
If you cannot simply pay off the debt in full, the quickest and surest way of stopping wage garnishment at that point is to file bankruptcy. The automatic stay immediately terminates the garnishment and you will obtain a discharge of the debt.