The CFPB says most creditors can garnish wages or benefits only after a court issues a judgment saying you owe the debt and allowing garnishment. The order generally covers the judgment amount plus interest, fees and collection costs. Federal and state laws limit how much can be taken and protect a minimum amount in a bank account.
Federal law generally protects some earned wages. Banks must protect two months’ worth of direct-deposited federal benefits before freezing or garnishing money in an account, and you can claim the exemption for up to two months of federal benefits deposited by check. Covered benefits generally include Social Security, Supplemental Security Income, veterans’ benefits, Federal Railroad retirement, unemployment and sickness payments, Civil Service Retirement and Federal Employee Retirement System payments. State exemptions may add protection.
Exceptions: federal and state agencies can sometimes garnish without a court order. Agencies such as the IRS or the Department of Education can take up to 15 percent of Social Security or SSDI benefits, and states can generally garnish wages or bank funds for child support.
The CFPB notes people sometimes learn of a garnishment only when funds are frozen, and says not to ignore a lawsuit. An attorney experienced in consumer law can help you claim exemptions.