Money That Cannot be Taken from You ("Garnished") to pay off a Debt
Authored By: Northwest Justice Project
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
- What income is exempt?
- Should I keep my money in an account at a bank I owe money to?
- My creditor has sued me over a debt I owe. What should I do?
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.
*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)
TANF benefits (state welfare)
ABD benefits (state disability)
Unemployment Compensation (unless you owe child support)
VA benefits (with some exceptions for money you owe the government or for support)
Federal student loans
Child support you receive
$500 in your bank account and $1,000 additional cash, for a total exemption of up to $1,500 (if your only judgment is for private student loan debt, you can have up to $2,500 in a bank account)
*DO NOT PUT ANY MONEY OTHER THAN SOCIAL SECURITY OR VA BENEFITS IN A BANK ACCOUNT if you can help it. Even though $500 in a bank account is exempt from garnishment if you have less than $1,500 in cash, the bank may freeze your account anyway if the creditor claims you actually have more than $1,500 total. This can cause bounced checks, overdraft fees, and other bank charges.
*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
Wages - If you make less than these amounts, none of your wages can be garnished:
$507.50 every 2 weeks
$550.00 twice a month
Even if you take home more than these amounts, you may still keep 75% of your take home pay. (Example: You earn $400 per week after taxes. This is more than $253.75. Multiply your take-home pay by 75% ($400 x .75 = $300). The law allows you to keep $300. A creditor can take $100 of that check.)
*If the creditor is trying to collect on private student loan debt, you can still keep the greater of 85% of your take-home pay or 50 times the highest minimum wage in the state. In 2019, the highest minimum wage in Washington state is $15.00 an hour.
If possible, do not get your pay check by direct deposit. 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.
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.
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. When Should I File a Declaration of Exempt Income and Assets? has forms and more information.
If you receive an order to attend Supplemental Proceedings, you MUST go or respond. Supplemental Proceedings has more information.
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 March 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.)