Close this search box.

Table of Contents



Garnishment is a legal process in which a creditor obtains a court order to withhold a portion of a debtor’s income or assets to repay an outstanding debt. It typically occurs when the debtor fails to repay the debt voluntarily or defaults on their loan obligations. Common forms of garnishment include wage garnishment, where a portion of an individual’s salary is withheld, and bank account garnishment, where funds are directly seized from the debtor’s account.


The phonetic pronunciation of the keyword “Garnishment” is: /ˈɡɑrnɪʃmənt/

Key Takeaways

  1. Garnishment is a legal process where a portion of an individual’s wages, bank accounts, or other assets are withheld in order to satisfy a debt or court-ordered financial obligation.
  2. Garnishments can be initiated by creditors, government agencies, or other organizations to collect debts such as unpaid taxes, child support, alimony, or student loans.
  3. Individuals subject to garnishment have certain rights and protections under federal and state laws, which may include exemptions, maximum amount limits, and processes to contest or appeal the garnishment order.


Garnishment is an important term in business and finance as it refers to a legal procedure used by creditors to collect outstanding debts from borrowers who have failed to meet their payment obligations. Through garnishment, the court orders the debtor’s employer or bank to withhold or “garnish” a certain portion of the debtor’s wages or account funds, effectively redirecting them to the creditor to settle the debt. This process serves as a last resort to ensure debt repayment and protect a lender’s financial interests, while also imposing a sense of accountability and responsibility on borrowers to fulfill their financial commitments. Understanding garnishment is essential for both creditors and debtors to safeguard their rights and navigate the complexities involved in settling overdue debts.


Garnishment serves as a legal means for creditors to collect unpaid debts from debtors, ensuring that the borrowed money is eventually repaid. It acts as a last resort in the debt collection process when a debtor repeatedly fails to make payments. During this process, a court order is issued allowing the creditor to directly withhold a portion of the debtor’s income, such as wages or bank accounts, for debt repayment. Garnishments are initiated to encourage debtors to commit to repayment plans, thus promoting personal responsibility and accountability in the world of finance and business. The implementation of garnishment is carefully regulated by law and usually reserved for specific situations, such as unpaid taxes, defaulted student loans, and unpaid child or spousal support. This legal tool serves as a crucial safeguard to ensure the stability and continuity of financial relationships between creditors and borrowers. By establishing a mechanism for debt recovery, garnishment discourages potential defaulters and paves the way for responsible lending and borrowing habits. Ultimately, garnishment plays a significant role in supporting a reliable economic environment and fostering trust between various financial entities.


1. Wage Garnishment: A common example of garnishment in the real world is wage garnishment, where an individual’s employer is required by law to withhold a portion of the individual’s earnings in order to pay off their outstanding debts. For instance, if someone is behind on their child support payments, a court could order that a percentage of their salary be garnished and sent directly to the custodial parent until the debt is paid in full. 2. Bank Account Garnishment: Another example of garnishment is bank account garnishment, in which a debtor’s financial institution is required to freeze and seize a specified amount of money from their account to satisfy a debt. This often occurs when an individual has unpaid taxes, defaulted on a loan, or failed to pay a court judgment. For example, if someone has a significant amount of unpaid credit card debt, the credit card company may obtain a court order to garnish their bank account, seizing funds to pay off the outstanding balance. 3. Tax Refund Garnishment: A third example of garnishment is tax refund garnishment, where the government can withhold all or part of an individual’s tax refund to pay off outstanding state or federal debts. For example, if a person has defaulted on their student loans or owes back taxes, their tax refund may be garnished to repay those debts. This also applies to unpaid child support or alimony obligations, where the owed funds will be taken from the tax refund before it is issued to the individual.

Frequently Asked Questions(FAQ)

What is garnishment?
Garnishment is a legal process in which a creditor obtains a court order to withhold a portion of a debtor’s earnings or financial assets to satisfy an outstanding debt.
How does garnishment work?
The garnishment process begins when a creditor, such as a bank or credit card company, files a lawsuit against the debtor for non-payment of a debt. If the judge rules in favor of the creditor, a garnishment order is issued, instructing the debtor’s employer or financial institution to withhold a specific amount from the debtor’s wages or account until the debt is paid off.
Are there different types of garnishments?
Yes, there are two main types of garnishments: wage garnishment and non-wage garnishment. Wage garnishment involves directly withholding a portion of the debtor’s salary or wages, while non-wage garnishment involves seizing financial assets such as bank accounts or levies on personal property.
Are there any limits on the amount that can be garnished?
Yes, garnishments are subject to specific federal and state limitations that dictate how much of a debtor’s income or assets can be withheld. For wage garnishments, federal law typically limits this to 25% of the debtor’s disposable earnings. However, factors such as the type of debt, the debtor’s income, and state laws can affect these limits.
How long does a garnishment last?
A garnishment order typically remains in place until the debt is fully paid off or a negotiated settlement is reached with the creditor. However, certain conditions can result in the lifting of a garnishment order, such as filing for bankruptcy or successfully disputing the underlying debt.
Can garnishment occur without a court order?
In most cases, a creditor must obtain a court order before garnishing a debtor’s wages or financial assets. Exceptions include tax debts, federal student loans, and child support, where administrative garnishments can be initiated without a court order.
How can a debtor stop or dispute a garnishment?
To stop or dispute a garnishment, the debtor has several options, including filing for bankruptcy, negotiating with the creditor to reach a settlement or payment arrangement, or challenging the garnishment order in court by disputing the validity of the debt, claiming exemptions, or proving the garnishment amount is too high.
Can a person be fired because of a garnishment?
According to federal law, an employer cannot terminate an employee solely because their wages are being garnished for a single debt. However, if the employee’s wages are garnished for multiple debts, they may not be protected from termination. State laws may also provide additional protection for workers subjected to wage garnishments.
Are there any exceptions to garnishments?
Yes, some types of income and assets are exempt from garnishment. These exceptions may include Social Security benefits, unemployment benefits, workers’ compensation, veterans’ benefits, and specific types of retirement income. However, different rules apply to child support and tax debts, which may allow these benefits to be garnished in certain cases.
Can a garnishment affect one’s credit score?
While a garnishment itself does not directly impact your credit score, the legal proceedings and judgment leading to the garnishment are public records that can negatively affect your credit rating. Additionally, garnishments might indicate financial distress, which can harm future borrowing opportunities.

Related Finance Terms

Sources for More Information

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More