More Than One Party Garnishing Your Wages At The Same Time

Multiple Creditors and Their Claim to Your Paycheck

By federal law, in most cases only one creditor can lay claim to your wages at a single time. In essence, whichever creditor files for an order first gets to garnish your paycheck. Your other creditors must wait their turn unless the first creditor collects on less than the allowable percentage. In that case, another creditor's order can be put into effect up to the amount allowed by law to be taken out of each of your paychecks.

There are exceptions to this rule, however. Some types of debts, such as child support, alimony, and owed taxes, can be collected upon at the same times as other debts, such as credit card or medical bills. If you owe child support, back taxes, or alimony, it is possible for your paycheck to be garnished by both the state or federal government, as well as another creditor, such as a medical collection agency or a credit card company.

Can my paycheck be garnished by two different collection companies at the same time?

The amount that your wages can be garnished for the collection of a judgment on an unsecured debt primarily depends on your state’s laws relating to wage garnishment. In most states, a judgment debtor’s wages can be garnished up to a maximum of 25% of his or her net income. In fact, 25% is the maximum garnishment allowed under federal law, so no state allows garnishment of more than 25% of a debtor’s net income. However, some states further limit the amount that can be garnished from their residents. I will explain more about garnishment in just a moment.

In states such as Texas, North Carolina, South Carolina, and Pennsylvania they do not generally allow wage garnishment for unsecured debts, while Florida does not allow garnishment if a debtor is considered the head of a household. Also, many state courts will reduce the amount of a garnishment if the debtor can demonstrate that the current garnishment amount is causing an undue hardship for the debtor and his family.

Before you assume that your wages will be garnished, I encourage you to review your state’s laws relating to garnishment for the payment of judgments for unsecured debts. To read more about your state’s laws relating to wage garnishment and what other assets are protected by state law, see the Bills.com State Consumer Protection Laws and Exemptions resource.

General Garnishment Rules

Garnishment limits outlined by federal and state laws define the maximum total amount that can be garnished from a debtor’s paycheck at any one time. For example, under federal law, the maximum that a consumer can be garnished for the collection of an unsecured debt judgment is 25% of his after-tax earnings. Generally speaking, if a consumer has more than one judgment creditor attempting to garnish his wages, the creditor who files for garnishment first is paid first; any garnishments received while a garnishment is already in place will sit unpaid until the first garnishment is paid.

Certain types of garnishments, such as those for delinquent taxes or child support, take priority over garnishments for regular judgments, so even if you are already being garnished by a creditor, if the IRS sends a garnishment notice to your employer, the first garnishment would stop the IRS would be paid before the garnishment for the judgment resumed. Also, you should know that the amount that can be garnished to pay these "priority debts" is generally higher than the amount that can be garnished for regular judgments. For example, a garnishment for delinquent child support may be able to take as much as 50% of your earnings, or possibly even more, depending on your state’s laws and the court order requiring the child support payments.

So, in a simple answer to your question, creditors cannot each garnish 25% of your wages; the creditors will either be forced to split the garnishment amount, or they will be required to wait in line to be paid in the order the garnishments were received by your employer. However, you must consider that having multiple garnishments sent to your employer may be grounds for termination of your employment. Under federal law, you cannot be fired for receiving one garnishment, but subsequent garnishments could be cause for your employer to terminate your employment, depending on your state’s laws and your employer’s policies relating to garnishments. If at all possible, I strongly encourage you to resolve these debts before a wage garnishment begins to prevent any potential problems with your employer.