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Money That Cannot be Taken from You ("Garnished") to pay off a Debt

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The law protects certain types of income and property from garnishment by creditors. These funds cannot be taken from you to pay off a debt, even one a court has said you owe. We call these funds "exempt." #0208EN

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Introduction

The law protects certain types of income and property from garnishment by creditors. They cannot take these funds from you to pay off a debt, even one a court says you owe. These funds are “exempt.”

There are a few exceptions to these exemptions for child support, federal student loans, and some other debts to the federal government.

What income is exempt?

*These are general exemptions. Every case is different. See a lawyer for advice about your situation.

These types of income or money cannot be taken from you to pay off a debt:

  • Social Security disability and retirement benefits (unless you owe child support, federal student loans, or a federal tax debt)

  • SSI benefits

  • TANF benefits (state welfare)

  • ABD benefits (state disability)

  • Unemployment Compensation (unless you owe child support)

  • VA (Veteran’s Administration) benefits (with some exceptions for money you owe the government or for support)

  • Federal student loans

  • Child support you receive

  • Most pensions

  • Money in your bank account:

  • $2,500 is exempt if your only judgment is for private student loan debt

  • $2,000 is exempt if the judgment you are being garnished for is consumer debt

  • $500 in your bank account is exempt for all other debts (and $1,000 additional cash, for a total exemption of up to $1500)

*Most garnishments will be for judgments for consumer debtConsumer debts include debts from credit cards, doctor bills, hospital bills, utility bills, phone bills, personal loans from a bank or credit union, debts owed to a landlord or former landlord, or any other debt for personal, family, or household purposes.

*DO NOT PUT ANY MONEY OTHER THAN SOCIAL SECURITY OR VA BENEFITS IN A BANK ACCOUNT if you can help it.

Even though some or all of the money in your account may be exempt from garnishment, the bank may freeze your account anyway.  This can cause bounced checks, overdraft fees, and other bank charges. You must file an exemption claim form to get the exempt money returned to your account.  Read How to Claim Personal Property Exemptions. Your money may not be available to you for weeks.  You will not be able to pay your rent and other bills during this time.

Most pensions are exempt from garnishment even after you receive them. But some are not. Do not have pension checks direct deposited into a bank account, if possible. See if the pension fund can mail checks directly to your home.

IF A CREDITOR TRIES TO TAKE MONEY FROM YOUR BANK ACCOUNT, CALL CLEAR AT 1-888-201-1014 FOR HELP. Also, read How to Claim Personal Property Exemptions.

How much of my wages are exempt?

The amount of wages protected from garnishment depends on what the debt or judgment was for.

CONSUMER JUDGMENTS:

If you earn less than these amounts, none of your wages can be garnished:

  • $420.00 weekly (35x the state minimum hourly wage)

  • $840.00 every 2 weeks

  • $910.00 twice a month

  • $1,820.00 monthly

  • Even if you earn more than these amounts, you may still keep the greater of 35x the state minimum hourly wage or 80% of your net pay.

PRIVATE STUDENT LOAN JUDGMENTS:

If you earn less than these amounts, none of your wages can be garnished:

  • $800.00 weekly (50x the highest minimum hourly wage in the State)

  • $1,600.00 every 2 weeks

  • $1,733.33 twice a month

  • $3,466.67 monthly

  • Even if you earn more than these amounts, you may still keep the greater of 50x the highest minimum hourly wage in the State or 85% of your net pay.

OTHER JUDGMENTS:

  • If you earn less than these amounts, none of your wages can be garnished.

  • $253.75 weekly

  • $507.50 every 2 weeks

  • $549.80 twice a month

  • $1,099.58 monthly

  • Even if you earn more than these amounts, you may still keep the greater of 35x the federal minimum wage or 75% of your net pay.

CHILD SUPPORT:

  • 50% of your net pay is protected from garnishment

*Net pay is your earnings after subtracting mandatory deductions.  Mandatory deductions include Social Security, Medicare, and federal income taxes.

Should I get my paycheck by direct deposit?

If possible, no. Wages are exempt from garnishment at the time your employer pays you. If you cash your check and put the money in a bank account, or if your employer pays you by direct deposit, a creditor may claim that the funds are no longer exempt as wages.

*Never give creditors permission to withdraw money from your bank account.

Should I keep my money in an account at a bank I owe money to?

No. Your deposit bank can take money from your bank account to pay what you owe them.

Examples: Do not have a bank account at a bank where you have one of the bank’s credit cards, or where you owe on a loan.

My creditor has sued me over a debt I owe. What should I do?

Talk with a lawyer right away.

*Do not ignore court papers!

Even if your income and assets are exempt from garnishment, you should still fill out a Declaration Regarding Income and Assets Exempt from Garnishment form to file with the court. It will show that the creditor cannot take your income and assets.  Use When Should I File a Declaration of Exempt Income and Assets.

I received an order to attend Supplemental Proceedings.  What should I do?  

You MUST comply with the order. Read Supplemental Proceedings.

 

This publication provides general information concerning your rights and responsibilities. It is not intended as a substitute for specific legal advice.
This information is current as of November 2019.

© 2019 Northwest Justice Project — 1-888-201-1014.

(Permission for copying and distribution granted to the Alliance for Equal Justice and to individuals for non-commercial purposes only.)

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Last Review and Update: Nov 06, 2019
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