What to do if 100% of my wages are being garnished?

UPDATED: Dec 7, 2012

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What to do if 100% of my wages are being garnished?

I have had a collector garnish my checking account over a old credit card debt starting last summer. Last month they started a wage garnishment and it has been in effect for the last 2 pay periods. My employer requires me to direct deposit my check. Now this week they garnished my chekcing account again bascially circumventing the 25% cap and taking 100% of my wages. Is this legal?

Asked on December 7, 2012 under Bankruptcy Law, Michigan


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As you seem to aware, there is a legal limit on how much can be garnished--in brief, it's up to 25% of disposable income in most states, with "disposable income," for this purpose, being defined as income after legally mandated withholding (e.g. FICA).

However, that limit only applies to actual wage garnishments--when the employer diverts part of your pay to the creditor. That limit does not apply to a levy or execution on a bank account, even when the net effect is take all your pay; once the money is in the bank, it's fair game. This is legal.

You may be able to get around it, at least temporarily, by opening a different account at a different bank and switching the deposit to it; that will stymie the creditor at least until it learns of the new account (at which point you may then switch accounts again).

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