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Can a Debt Collector Take Money from My Paycheck?

Debt Defense: Taking Money from Paycheck

A debt collector may garnish your wages or bank accounts as part of the debt collection procedure to pay the outstanding balance owed. And in the United States, state and federal laws permit this practice.

That doesn’t, however, give any debt collector the right to withdraw money from your accounts anytime they like. There are guidelines for account garnishment, and some forms of income may even be exempt from it. To comprehend the effects of a debt collector deducting money from your paycheck, read the article below.

Wage Garnishment

Any legal or fair method whereby a person’s paycheck must be withheld in order to pay off an unpaid debt is known as a wage garnishment. Court orders are typically used to make garnishments. Levies by the Internal Revenue Service or state tax collection agencies for unpaid taxes and administrative garnishments by federal agencies for debts owed to the federal government other than taxes are examples of additional legal or equitable garnishment methods.

Voluntary wage assignments, or circumstances in which employees voluntarily agree that their employers may turn over a specific amount of their earnings to a creditor or creditors, are not included in wage garnishments.

Paycheck Deductions

Some employers may deduct money from employees’ paychecks in addition to garnishments paid to third parties. Some deductions are prohibited by federal law when they bring an employee’s paycheck below the minimum wage. According to the Fair Labor Standards Act, an employer may not deduct an employee’s salary below the minimum wage by deducting the cost of items that are largely for the benefit of the employer, such as uniforms or tools.

For instance, if it would result in a worker earning less than the minimum wage, an employer isn’t allowed to:

  • Demand that an employee pay back or reimburse an employer for a damaged tool or a shortage of funds
  • Make employees pay for clients who refuse to pay their bills
  • Demand an employee to buy or maintain equipment or work attire

Federal law does not prohibit the deductions if they don’t end in an employee earning less than the minimum wage.

Can a Debt Collector Take Money from My Paycheck?

can a debt collector take money from my paycheckYour paychecks may in fact be garnished by a debt collector. You need to be filed against a lawsuit for this to occur. If you lose this action, you could be ordered to have your assets or salary garnished.

When wages are garnished, a portion of the debtor’s paycheck is taken out and sent to the creditor to use as payment for the past-due debt. A lien is put on the asset for the judgment amount when another asset, like a property, is subject to the garnishment. The proceeds from the sale of the property are initially given to the creditors.

Collecting Judgments

Every state has procedures in place for enforcing court orders against debtors. One of those techniques is wage garnishments. The amount that you owe will be specified in the court’s judgment. You can be responsible for paying both the initial debt and any additional fees or costs that the court decides are necessary. How much can be deducted from your paycheck may also be specified in a subsequent court order.


Wage garnishments made by debt collectors are subject to restrictions or “exemptions” under state and federal law, mainly to ensure that you have enough money to survive on. If your paychecks are being garnished, it might be a good idea to get legal advice.

Majority of Garnishments Need a Court Order

First and foremost, if a debt collector contacts and threatens to take money from your paychecks, they are generally lying unless they have previously acquired a court order, in which case they wouldn’t be calling to threaten but would instead just take the money.

A court order is required for a debt collector to take the money that the court has determined they are legally entitled to through garnishment. They may deduct it from your paychecks or already-deposited funds in your bank accounts.

Also keep in mind that you did not consent to the withdrawal; rather, the court order is presented by the collector to your bank or credit union, which is then required by law to send over the funds from your accounts.

Creditors Who Can Take Money from Paycheck Without Filing a Lawsuit

Not all creditors are required to wait until after a trial before garnishing earnings. The following debts are deemed significant enough to have unique regulations that aid creditors in expediting the collection process.

  • Child Support and Alimony

Wage withholding orders are automatically included in all child support orders. Your wages may be taken without further judicial intervention if you have been ordered to pay child support. If you aren’t paying your alimony or child support, a wage garnishment order might be filed against you.

Child support and alimony have substantially higher wage garnishment limits than other types of debt. If you are sustaining a spouse or child who isn’t the subject of the wage garnishment order, federal law permits garnishment of up to 50% of your disposable earnings (gross wages less mandatory legal deductions). 

  • Unpaid Income Taxes

The federal government may garnish your earnings without obtaining a court order if you owe unpaid taxes to the IRS. The number of dependents you have, and the amount of your deductions will determine how much the IRS can take.

Your paychecks may also be garnished by the state and local governments to recover unpaid taxes. State laws, however, determine the amount they can take and the procedures they must follow. 

  • Student Loans

The amount of the garnishment is limited to 15% of your disposable income or the amount by which your weekly disposable wages exceed 30 times the federal minimum wage, whichever is less, if you are in default on your federal student loan payments, United States Department of Education (or any entity collecting on its behalf) may garnish your wages without a court order.

Limitations on Taking Money from your Paychecks

Based on an employee’s “disposable earnings,” or the amount of earnings remaining after all legally required deductions have been made, the amount of pay that is liable to garnishment is determined. Federal, state, and local taxes, as well as the employee’s portion of Social Security, Medicare, and state unemployment insurance taxes, are a few examples of these deductions. It also contains the legally needed deductions for employee retirement systems.

When determining disposable earnings under the Consumer Credit Protection Act, deductions not mandated by law, such as those for voluntary wage assignments, union dues, health and life insurance, donations to charitable organizations, purchases of savings bonds, retirement plan contributions (aside from those mandated by law), and payments to employers for payroll advances or merchandise purchases, typically may not be deducted from gross earnings.

No matter how many garnishment orders the employer receives, Title III of the CCPA establishes the maximum amount that may be deducted in each workweek or pay period. The weekly amount for ordinary garnishments (i.e., those not for support, bankruptcy, or any state or federal tax) may not be larger than 25% of the employee’s disposable income or the amount by which the employee’s disposable income exceeds 30 times the federal minimum wage, whichever is less.

The maximum amounts that could be garnished must be determined using multiples of the weekly restrictions when pay periods last more than one week. 

Consult to Our Debt Defense Attorney Right Away!

It is quite challenging to overturn a court judgment after a debt collector obtains a court order and begins unexpectedly garnishing your wages. The truth is that if you take legal action early on in the litigation, you can protect your defenses and, in many situations, you have a strong chance of either defeating the debt collector or reducing the amount of the debt that you ultimately have to pay back.

Many debt collectors lack sufficient proof to support their claims that you owe them any money or that they have the right to sue you. Naturally, if you do nothing, the judge simply awards them every penny they requested in their complaint.

The time to take action is now if you have been served with a collection lawsuit. To determine what defenses you might have and how to handle this situation, you should schedule a consultation with a lawyer. 

Our skilled Portland, Oregon debt defense attorneys can offer assistance.  At Northwest Debt Defense Law Firm, we deal all day with the attorneys for debt collectors. For a free debt analysis, contact our Washington debt collection defense attorneys.

We can also help you regarding your debt defense problems anywhere you are in Salem and Medford, Portugal and areas of Vancouver, Seattle, Tacoma, state of Washington.

In Need of Debt Defense? Call Us!

Facing a Debt Lawsuit? We Can Help!

Northwest Debt Defense Law Firm

650 NE Holladay St, Suite 1640
Portland, OR 97232, United States

NW Debt Defense Law Firm is a Debt Relief Agency. Where appropriate we file petitions for relief under the Bankruptcy Code solely for consumers in the District of Oregon. We represent both Oregon and Washington consumers in collections law suits in Oregon and Washington state courts.


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