Stopping Wage Garnishment: Limits, Exemptions, and Options

How Much of Your Pay Can Be Taken

Wage garnishment is capped by law, and the cap is more protective than many people fear. In the US, the federal Consumer Credit Protection Act (CCPA) limits garnishment for ordinary debts to the lesser of 25% of your disposable earnings or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage. Disposable earnings are what remain after legally required deductions. Many states impose lower caps, protect more income, or bar wage garnishment for most consumer debts altogether, and where federal and state law differ, the more protective limit applies.

In Canada, wage-garnishment exemptions are set province by province and vary widely. Some provinces protect a fixed dollar amount of monthly wages, others a percentage, and the protected share often rises with the number of dependants you support. Because the numbers differ so much across provinces and states, the first practical step is confirming the exact limit that applies where you work — a garnishment that exceeds the lawful cap can be challenged and reduced.

Support, Taxes, and Student Loans Are Different

The ordinary caps do not apply to every debt. In the US, garnishment for child support or alimony can reach 50% to 60% of disposable earnings, and garnishments by the IRS for back taxes or by the Department of Education for defaulted federal student loans follow their own formulas rather than the 25% consumer-debt limit. These debts also generally survive bankruptcy, though Chapter 13 can help you manage the arrears over a plan.

In Canada, family-support garnishments and CRA tax garnishments similarly follow special rules and are harder to stop than ordinary creditor garnishments. Support obligations are not released by bankruptcy or a proposal, while tax debt can be included in an insolvency filing but the CRA holds broad collection powers until then. Knowing which category your garnishment falls into is essential, because it determines both how much can be taken and which remedies are realistic.

Four Ways to Stop or Reduce a Garnishment

First, challenge the foundation. For most consumer debts, a creditor must sue and obtain a judgment before it can garnish. If you were never properly served and a default judgment was entered without your knowledge, you may be able to set it aside, which removes the basis for the garnishment. Second, claim an exemption or hardship reduction: if the garnishment leaves you unable to meet basic needs, courts commonly allow you to apply to reduce or suspend it, and some income like public benefits is exempt entirely — but you must file the claim, as protection is not automatic.

Third, negotiate. Creditors will sometimes withdraw a garnishment in exchange for a voluntary payment arrangement that is more predictable for them. Fourth, and most powerfully, file for insolvency: a consumer proposal or bankruptcy in Canada, or a Chapter 7 or Chapter 13 case in the US, triggers an automatic stay that stops most garnishments almost immediately. Because limits, exemptions, and procedures vary and change, confirm your specific options with a Licensed Insolvency Trustee or a licensed attorney before acting.

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