Indiana Wage Garnishment Law

In Indiana, you may be ordered to appear in court for debts you owe to credit card companies, in back child support, for property damage or in a personal injury lawsuit. A creditor must file a complaint against you where the court will make a judgment. If you fail to pay judgments against you, the court will garnish your wages until the debt is resolved. Indiana has strict garnishment guidelines.

How Much?

Indiana courts may garnish wages through your employer or bank account. The court often orders your employer to take up to 25 percent of your disposable earnings or 30 times the federal minimum wage rate-whichever is greater. According to the Indiana Legislative Services Agency, you will be required to pay an interest rate of 8 percent.

Child Support

In Indiana, if you haven't kept up with child support payments, the law allows garnishment of up to 50 percent of your disposable income. A court order to garnish your wages for child support will always take precedence over other garnishment orders against you such as an unpaid credit card balance or medical bills.

Bank Garnishment

A creditor can obtain garnishments directly through the debtor’s bank account in the state of Indiana. In order to do so, the creditor must send a court order with a set of answered interrogatories to the bank. Interrogatories are lawfully recognized documents where the defendant (the debtor) signs under oath, confirming or denying a set of questions and answers. In this case, the debtor is confirming that the bank holds funds belonging to him or her as stated in the court judgment. In addition, Indiana law allows banks to freeze funds for 90 days in order to review all court documents.

Statute of Limitations

Indiana law does limit the period of time the state or a creditor can file a case in court to garnish your wages. For example, for breached contracts (both written and oral and not involving the sale of goods) there is a six year time limit. For a breach of contract involving the sale of goods, the statue of limitations is four years. There is a two year time limit for small claim cases such a personal injury and property damage lawsuits. As for child support, Indiana stops garnishing a parent's wages once the child reaches the age of 18.

Exceptions

According to the Indiana Department of Workforce Development’s website, employers cannot fire employees who have wage garnishments. If an employee’s wage is less than the 30 percent of the federal mandated minimum wage rate, than that person is exempt from garnishment by law. In addition, Indiana exempts heads of households from wage garnishments as long as the person makes no more than $500 a week.

References

• Indiana Legislative Services Agency-Indiana Code
• Indiana Workforce Development
• Fairdebtcollection: Indiana Garnishment Laws

Resources

• Indiana.gov