How to Negotiate the Full or Partial Release of a Wage Garnishment


Under federal law, a creditor can garnish up to 25 percent of your weekly disposable pay once it goes to court and secures a judgment that allows it to do so. However, mechanisms exist to help you release all or a portion of your wages from garnishment. Even if you choose not to pursue these options, being aware of your rights can serve as a bargaining chip in your negotiations with the creditor.

Talk to the Debt Collector

  • Even if the creditor already has a garnishment order, certain incentives exist for it to cooperate with you. For example, you may be able to offer a lump-sum payment to pay off the debt more quickly. Creditors sometimes have to pay a garnishment processing fee to the employer, depending on state law. This fee can be incurred every week for each garnishment that the creditor receives, which ultimately can reduce the creditor's net debt repayment.

File a Claim for Exemption

  • Federal law prohibits the garnishment of certain types of income, such as Social Security benefits, child support or certain types of retirement income. States set their own exemptions as well, which may include workers' compensation benefits and unemployment compensation. Look for state-specific exemptions to help you hold on to a larger portion of your earnings. For example, in Oklahoma and California you can exempt all or a portion of wages from garnishment if you need the funds to support your family.

    States are free to establish stricter guidelines regarding how much money a creditor can take. For example, Illinois permits only 15 percent of your disposable wages to be garnished for consumer debts, in contrast to the 25 percent that federal law allows. If the creditor is taking too much out of your paycheck, file a claim for exemption with the court where the garnishment was issued.

Enter into a Repayment Plan

  • Laws may exist in the state that has jurisdiction of the garnishment that allow you to make payments through a voluntary payment plan instead of garnishment . For example, Michigan law allows you to enter into a repayment plan with a creditor even after the creditor receives a judgment. As long as you make the payments on time, the creditor cannot garnish your wages. You also might request assistance from a consumer credit counseling service that can intervene on your behalf and request a voluntary repayment program.

File for Bankruptcy

  • As a last resort, you might choose to file for bankruptcy. Doing so creates an automatic stay on existing garnishment orders. This means that creditors cannot continue a garnishment or pursue a new garnishment once they have notice of the bankruptcy filing. Additionally, bankruptcy can result in the discharge of a debt that is causing the garnishment. However, a bankruptcy filing usually does not stop support orders.


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