What is a Wage Garnishment?
Authored By: Montana Legal Services Association (MLSA)
If you live in Montana, this article will help you:
- Understand what wage garnishment is
- Learn your options if your wages are being garnished.
A wage garnishment is when a debt collector or creditor takes money from your paycheck to pay back a debt. A debt collector must have a court judgment against you to garnish your wages. Some debts owed to the federal government, like the IRS, do not need a court judgment to garnish your wages, but these are rare. Your employer must garnish your wages if a debt collector gives them a court order to do so.
There are limits to how much of your money a debt collector may take out of your paycheck. The money that a debt collector may not take from you paycheck is called exempt. If a debt collector takes more than the law allows, you only have 10 business days after you get notice of the garnishment to file court paperwork to ask for your exempt wages back.
If your wages are being garnished outside of the State of Montana, this information is not right for you. Instead, you should look for legal help in the state where your wages are being garnished.
You may have other rights when your wages are being garnished, so it’s helpful to talk to a lawyer. If your debt is overwhelming, you may want to think about filing for bankruptcy.
Keep on reading if you’d like to learn about your options if your wages are being garnished in Montana.
You may have options if a debt collector is garnishing your wages. You can:
- Double check to make sure they are not taking more than what the law allows. Keep reading to learn how.
- File court paperwork to ask for your wages back if a debt collector took more than the law allows.
- Talk to a lawyer if you have questions about your rights.
- Think about filing for bankruptcy if your debt is overwhelming.
How much of my wages can be garnished?
The laws for wage garnishment are complicated. The law bases how much of your wages may be garnished on your weekly disposable earnings. Disposable earnings are the part of your paycheck leftover after mandatory withholdings. Common mandatory withholdings are:
- State and federal tax withholdings,
- Union dues, and some other already-existing garnishments.
Bills that you have to pay, like rent, utilities, and medical bills are not factored into how much a debt collector may garnish from your wages. The only thing that matters when figuring out how much a debt collector may take from your paycheck is how much you make.
The law in Montana protects the following amounts of your wages from garnishment:
- No garnishment is allowed if your weekly disposable earnings are less than $217.50 per week.
- If your weekly disposable earnings are more than $217.50 but less than $290.00, only the amount over $217.50 can be garnished.
- If your weekly disposable earnings are more than $290.00, no more than 25% of those earnings can be garnished.
If you get paid bi-weekly, semi-monthly, or monthly, the calculation works a bit differently than described above. You can download the Exemptions Worksheet below to calculate how much of your paycheck is exempt from garnishment.
If someone has taken more than they should from your wages, you only have 10 business days to file court paperwork to ask for it back. The paperwork that you would file with the Clerk of Court is called a Notice of Claimed Exemptions. You can go to our Notice of Claimed Exemptions form at the bottom of this article. The Notice of Claimed Exemptions includes a worksheet to help you figure out how much of your wages are exempt.
If you still aren’t sure if your income is exempt, it is a good idea to talk to a lawyer.
If you are feeling overwhelmed by debt, you may want to think about bankruptcy. Go to our article about bankruptcy in Montana.
If you any have questions, it’s a good idea to talk to a lawyer. Montana Legal Services Association (MLSA) provides free legal help to eligible clients. Learn more about how to apply for free legal help.
Go to the Notice of Claimed Exemptions form.
Financial counseling can help you understand your financial situation and options. The Department of Housing and Urban Development (HUD) trains and certifies non-profit housing counselors across the country. Because of this, you can have confidence that a HUD-approved housing counselor is well equipped to help you understand and evaluate your options. HUD-approved housing counselors can give advice on credit issues, renting, foreclosures, defaults, and buying a home. You can find a HUD-certified counselor near you.