Garnishment is a legal means by which creditors can collect a debt from a defaulted debtor. When a debtor or borrower defaults on a loan or other debt, the creditor may seek to enforce the debt through judicial court proceedings. During these proceedings, the court may issue an order requiring the debtor’s employer or other third party to pay all or a portion of the debtor’s wages directly to the creditor. This is known as garnishment.

Garnishment is typically used when other efforts such as direct contact with the debtor or collection agencies have been unsuccessful. The court will provide the employer or third party with a Garnishment Order detailing the amount of wages to be withheld and to whom they should be sent. That sum is then typically deducted straight from the debtor’s paycheck and paid to the creditor.

The Consumer Credit Protection Act limits how much of a debtor’s wages can be garnished, except in certain circumstances such as unpaid taxes, delinquent child support, bankruptcy orders, defaulted student loans, or voluntary wage assignments. Generally speaking, the creditor can only garnish 25% of the debtor's disposable earnings or the amount by which the debtor’s weekly earnings exceed 30 times the federal minimum hourly wage.

Depending on a person’s financial and housing situation, garnishment can have an enormous impact on a debtor's life, quickly reducing and eliminating disposable income that would normally be used to cover basic expenses such as rent, food, and utilities. Anyone facing garnishment should consider asking the court for a hearing to seek relief if financial hardship is an issue. The court may be willing to lower the amount of garnishment to allow the debtor to cover their basic needs.