Can Wages Be Garnished for Medical Bills?

Medical bills are considered unsecured debt, meaning that there is no collateral to cover them. As with debt incurred with credit cards or personal loans, an unsecured creditor must first sue and win a win a judgment before it can take action to collect the debt. However, once they obtain a judgment, medical bill creditors can garnish wages, but they must adhere to the regulations and procedures governing all other unsecured creditors.

How Garnishment Works

After a medical creditor sues and wins a judgment, your employer receives a notification to hold back a portion of your wages to be paid to your creditor. Though it varies in some states, most often a creditor can only claim 25 percent of your net income. There is also a portion of your income up to 30 times the federal minimum wage that is exempt from garnishment. For example, the current federal minimum hourly wage is $7.25, which means that $217.50 (30 x $7.25) of your weekly pay is exempt from garnishment to pay medical bill creditors.

Exempt Income Sources

There are other sources of income that are exempt from garnishment. Government assistance such as welfare benefits are not eligible for garnishment, nor are Supplement Security Income (SSI), Social Security, unemployment benefits, and student loans, grants or work-study payments. In addition, most pension and retirement plans are immune to garnishment. Not only are these exempt as income, but any savings you build using them is also protected from seizure by an unsecured creditor.

Modifying the Judgment

Before the garnishment begins you'll be given a notice of garnishment. Once you receive this you can file to have a hearing. This hearing is your chance to explain why the garnishment amount should be modified or lowered. You'll need proof of your income, as well as your monthly expenses, such as rent, food, utilities or medical care.

Employment Protection

An employer cannot fire you for a single wage garnishment. However, there is no legal protection if you are being garnished by more than one creditor or if your wages are garnished more than once.