Credit Building Tips

How Long Can a Creditor Garnish My Wages? 10 Years? Longer?

By:
Shaun Connell
Updated
September 22, 2023

When a portion of your wages is being directly taken out of your paycheck to repay a debt, it's known as wage garnishment. Considering that this process can take a seriously negative toll on your finances, you probably have a lot of unanswered questions. One of the most common things people ask me about wage garnishment is "How long can a creditor garnish my wages?"

While statutes of limitations found under state law often limit how much time a creditor has to take legal action against you for an unpaid debt, these don't apply to how long wage garnishment can continue for.

Solution icon Wage garnishment will typically continue until the debt has been repaid. This means it can go on for ten years or even longer, depending on the amount you owe and how long it takes you to pay it in full.

At the same time, there are some options on the table if wage garnishment is causing you serious financial hardship. Your choices will depend on the type of debt and a number of other factors.

Can a Creditor Garnish My Wages?

Yes, a creditor can garnish your wages in some instances. For some types of debts, including child support and alimony, unpaid income taxes, and federal student loan debts, a court order is not necessary for money to start being taken from your paycheck.

how long can they garnish my wages calculator money and notepad

For most other types of debt, though, the creditor will need to:

  1. Sue you
  2. Get a money judgment
  3. Get a court order

Who Can Garnish My Wages?

There are a number of different types of debts that could result in wage garnishment through a court order.

Some examples of debts that creditors can pursue in this way include:

  • Child support
  • Alimony
  • Federal student loan
  • Back taxes
  • Money judgment for an unpaid debt, such as a personal loan or credit card balance

Does a Creditor Need to Sue Me to Garnish My Wages?

In order to begin garnishing wages, creditors typically have to sue you and receive a money judgment and court order in their favor. Creditors won't be able to immediately garnish your wages for most types of debt, such as medical bills and credit card bills.

That being said, some creditors don't have to go to court before they start taking money from your paycheck. There are special rules for three types of debt because they are viewed as important enough to ensure the debt can be collected.

These types of debt are:

  1. Child support and alimony
  2. Unpaid income taxes
  3. Student loans

Child Support and Alimony

There is automatically a wage withholding order included in child support orders. Your wages can, therefore, be garnished when you're ordered to pay child support without the court needing to take any additional action. If you fail to pay either child support or alimony obligations, a wage garnishment order against you can also be obtained.

It's worth noting that the wage garnishment limits for alimony and child support are significantly higher than for things like credit card debt or unpaid bills. The limits for wage garnishment for child support under federal law are:

  • 50% of your disposable income if you have a spouse or another child who isn't a party involved in the wage garnishment order
  • 60% of your disposable income if you don't have a spouse or another child that you are supporting

If you've fallen behind on your payments by twelve weeks or more, the cap on your garnishment can be increased by another five percent.

Unpaid Income Taxes

The federal government can also start garnishing your wages without needing to get a court order if you owe back taxes. Your deduction amounts and the number of dependents you have will impact the percentage of your income the IRS can garnish.

money in wallet being garnished from wages

In addition to the federal government having this right, state and local governments can also collect unpaid taxes through wage garnishment. State law will dictate how much they can garnish from your paycheck.

Student Loans

Known as an "administrative garnishment," money can be taken directly from your paycheck if you fall behind on your federal student loan payments. The limit on this type of garnishment is 15% of whichever of the following is the lesser amount:

  • Your disposable earnings
  • The amount by which your disposable wages (weekly) exceed the federal minimum wage times thirty

When Does a Wage Garnishment End?

There are a number of circumstances that will lead to the end of wage garnishment. If one of the following occurs, payments for your debt will no longer be taken directly out of your paycheck:

  • You pay off the debt in full
  • You settle the debt with the creditor
  • You pay off the debt (the whole thing or some of it) through a Chapter 13 repayment plan
  • You file for Chapter 7 bankruptcy and have the debt discharged
  • You ask the state court successfully to end the garnishment

How Much of My Wages Can Be Garnished?

There are federal limits on how much money can be taken from your disposable income when your wages are being garnished.

A certain percentage of your disposable income can be garnished by creditors in some circumstances. Disposable income refers to any money that you have left over after necessary deductions like Social Security and taxes.

The limits for wage garnishment are based on the type of debt. It's worth noting that some states utilize the federal guidelines, while others impose their own. For this reason, it's a good idea to look at what the guidelines are in your state if you're interested in learning how much of your wages can be garnished.

Here are the federal limits on the percentage of disposable income that can be garnished by a creditor:

  • Personal loans, medical bills, credit card debt, and most other consumer debts: Either 25% or the amount by which your weekly wages exceed the federal minimum wage times thirty, whichever is less.
  • Child support or alimony: If you are supporting another child or spouse, the limit is up to 50%. If you aren't supporting another child or spouse, the limit is up to 60%. An additional 5% can be taken if you're behind by more than twelve weeks.
  • Taxes: The amount taken will be determined by the IRS depending on the number of dependents you have and standard deductions.
  • Federal student loans: Up to 15%.

Can a Creditor Sue Me to Collect an Old Debt?

If you have an unpaid debt that is several years old, you might be wondering if the creditor can still try to get a wage garnishment order against you. Though debts typically only disappear until they're paid and generally don't expire, many states do have statutes of limitations on how long a creditor has to sue you in order to try and collect the debt.

Some debts don't have a statute of limitations, however, including federal student loans.

Understanding Wage Garnishment Laws

Federal law dictates that, for ordinary garnishments, a certain portion of your earnings are exempt from wage garnishment. The amount of your income that is exempt is whichever is greater of the two following options:

  • 75% of your disposable earnings, or
  • 30 times the federal minimum wage

These rules apply to consumer debts and other ordinary garnishments but don't apply to taxes, familial support, or bankruptcy.

While there are some states that follow the guidelines outlined by the federal government, others have set larger limits to the amount of a person's income that can be garnished through this process. Some states have even prohibited consumer debt wage garnishment. In the following states, your wages can't be garnished for consumer debts:

  • North Carolina
  • Pennsylvania
  • South Carolina
  • Texas

How Long Can a Creditor Garnish My Wages?

If a creditor receives a court judgment against you that orders your wages to be garnished, they can continue to do so until the debt has been repaid. 

Wage garnishment typically continues until a debt has been fully paid off. This means that it will not automatically stop after a certain number of years.

When you fail to make payments on a student loan that has been funded by the U.S. Department of Education, you might receive a document known as a notice of wage garnishment. You have thirty days to challenge the garnishment or arrange for a repayment plan. If you don't do this, the garnishment will go into effect and will not end until the debt has been paid off.

Can a Creditor Garnish My Wages For Ten Years?

Yes, wage garnishment can continue for seven years, ten years, or longer. How long you continue to have wages garnished from your paychecks depends on how long it takes for you to pay off the debt in full.

There are a number of things you can do to try and end wage garnishment when you aren't able to settle or pay the debt. We will take a look at your options in the next section.

Wage Garnishment: What to Do When You Can't Pay

There are several options on the table if you are motivated to stop a creditor from garnishing your wages under federal law as well as under each state's law.

File a Claim of Exemption

You might be able to protect some of your wages under your state's laws in certain circumstances. To do this, you'll need to file a claim of exemption with the court in your state. This is a process that entails asking for the creditor's garnishment to completely or partially stop.

File for Bankruptcy

Most types of wage garnishments will be immediately stopped when you file for bankruptcy. The reason for this is that there is an "automatic stay order" that will go into place at the time that you file. However, depending on the outcome of the case, this might only be temporary.

Depending on whether you file for Chapter 7 or Chapter 13 bankruptcy, the way the debt will be dealt with varies.

  • Chapter 7: If you successfully file for Chapter 7 bankruptcy, many types of debt can be completely wiped out. This usually takes three to four months. Examples of debts that can be cleared through this type of bankruptcy include personal loans, credit card balances, and personal loans.
  • Chapter 13: Through Chapter 13 bankruptcy, you can set up a payment plan to repay nondischargeable debts.

Of course, filing for bankruptcy isn't a decision you want to take lightly. It's also important to understand that several types of debts can't be discharged through bankruptcy. Here are some of the ways that bankruptcy can negatively impact your finances and your life:

  • Potentially requiring you to give up your possessions in order to repay creditors, including real estate, antiques, vehicles, jewelry, and other types of property
  • Potentially negatively impacting any co-signers on your debt, who could still be responsible for some of the debt
  • Damaging your credit and making it difficult to borrow money, such as getting a credit card or taking out a mortgage
  • Leaving a negative mark on your credit report for up to ten years

Tax and Student Loan Debt: Your Options

Creditors don't need to get a judgment against you before they start taking money directly from your paycheck for certain types of debt, including unpaid taxes and student loan debt. You typically cannot discharge this type of debt through bankruptcy.

If you want to stop the garnishment of your wages for tax debt, there is a process you can go through to negotiate your unpaid tax bill with the IRS.

For student loan wage garnishments, you can request a hearing to challenge the garnishment. There are a number of reasons you might choose to request a hearing, including:

  • Wage garnishment will impose a financial hardship on you
  • You don't owe the money, either because the loan was forgiven, you've already repaid it, or for some other reason
  • You've filed for bankruptcy
  • You've qualified for discharge, forgiveness, or cancellation of your loan

Stopping Wage Garnishment By Paying Your Debt

If you are able to pay off the debt in part or in full, that might be the best option for stopping wage garnishment. There are two primary ways you can do this:

  1. Settling the debt with the creditor, or
  2. Paying the garnishment and fully paying the debt over time

Settling the Debt With the Creditor

Creditors are motivated to recoup the money they are owed, and often would rather receive less money now in a lump sum than the full amount in smaller payments over time.

What this means is that you could be in a good position to settle the debt. You might find that the creditor will be willing to accept a smaller amount of money than the full balance of your debt if you are able to pay it now.

If you are able to come up with the money to pay off the settled amount, you will no longer have to deal with your wages being garnished. Of course, make sure that you receive the deal in writing from the creditor before making the payment.

Paying the Garnishment

If you don't stop the debt in some other way or settle the debt, the creditor will likely continue to take money directly from your paycheck. Every time they garnish your wages, the total balance that you owe will be reduced.

That being said, it's important to note that you'll likely also have to pay interest for many types of debt. Depending on your state's laws, the amount of money you owe in interest could vary from 2% to 18% in addition to the principal you owe.

If there is a significant interest rate attached to your debt, this can make it take a lot longer to pay off in full.

Wage Garnishment FAQs

Before I sign off, let's take a look at some common questions I receive about wage garnishment.

How Common Is Wage Garnishment?

If you are feeling overwhelmed by the fact that your wages are being garnished, it can be useful to know whether or not you're finding yourself in a unique situation. The truth is, there are more people out there getting their wages garnished than you might initially think.

According to the ADP Research Institute, 7% of employees in their study (which looked at 12 million individuals) had their wages garnished in 2016. This percentage increased to 10.2% for employees between the ages of 35 and 44.

The most common types of debt that individuals are dealing with when they have their wages garnished are:

  • Child support
  • Student loans
  • Consumer debts
  • Tax levies

What Are the Two Types of Garnishments?

It's worth noting that there are actually two different types of garnishments to be aware of:

  • Wage garnishments
  • Nonwage garnishments

Wage garnishment is when your employer is legally required by a creditor to give them part of your earnings in order to repay what you owe.

Nonwage garnishments, on the other hand, occur when a credit gains access to your bank account. These are also known as bank levies.

What Rights Do I Have If My Wages Are Being Garnished?

As a part of the wage garnishment process, you do have some rights. In most states in the U.S., however, the responsibility to be aware of these rights and exercise them falls on you.

Here are some things you'll want to be aware of if your wages are being garnished or you believe you are in danger of having your wages garnished:

  • You are required to receive legal notification of the garnishment.
  • You have the right to file a dispute if you believe you don't owe the debt or the notice has inaccurate information.
  • There are some types of income that are exempt from garnishment, including veterans benefits and Social Security. However, once they are in your bank account, they could be subject to seizure.
  • You are protected from losing your job if you have one wage garnishment. However, if you have more than one wage garnishment, you no longer have this protection.

Cleaning Up Your Credit Report When Your Wages Have Been Garnished

When your wages are being garnished for an unpaid debt, this process will typically continue until the debt has been fully repaid. Though it is difficult to stop wage garnishment once the creditor receives a court order, it isn't impossible. There is often a fairly short window for challenging wage garnishment, so it's important to act quickly once you have received notice.

You also might be able to file an exemption claim depending on the type of debt and the state you're in. It's possible that you'll have to respond to an exemption challenge from your creditor or go to court to present your case.

It is typically best to find an experienced attorney or other expert legal guidance when trying to stop wage garnishment. The truth is, there's a lot of variation between states when it comes to wage garnishment regulations, and they're often quite complicated.

Wage garnishment can have a significant impact on your current and future finances. Not only are you dealing with a reduction of income that can make it even harder to make ends meet, but it can also have a negative effect on your credit scores. Though your wage garnishment won't necessarily show up on your credit report, the series of missed payments that led to the garnishment will.

Are you interested in cleaning up your credit report and setting yourself up for a better financial future? Are you searching for resources to help you on your journey to improve your credit? If so, make sure you check out the rest of our Credit Building Tips blog!

Written By:
Shaun Connell
Shaun Connell is a personal finance and credit expert with a passion for helping individuals eliminate debt and improve their credit. He's enjoyed writing investing and financial content for over 15 years, with expertise in real estate, debt, banking, credit, and wealth building. His work has been seen by millions on the web.

Leave a Reply

Your email address will not be published. Required fields are marked *

Get Our Credit Building Tips Newsletter
Subscribe to receive information, free guides and tutorials