Can a Lender Garnish My Wages If I Am Retired & Have No Income?

Wage garnishment occurs when a creditor receives permission from a court to seize a portion of an individual's wages before the individual has been issued them. The practice of garnishment is regulated by both state and federal law, dictating the process that creditors must use when garnishing wages and from whom they may garnish them. A person who has no income cannot have their wages garnished, as there is no cash flow for creditors to divert.

Wage Garnishment

To garnish wages, a creditor must first receive a civil judgment against a debtor and then receive an order from the court compelling the debtor's employers to withhold a portion of the debtor's wages. These wages will then be transferred to the creditor. If a person is retired and has no income, a judge will not approve a garnishment, because there is nothing to garnish. He can, however, order a debtor's bank account frozen and its contents seized.

Exemptions to Garnishment

There are a number of different sources of income that federal law protects from garnishment. These include most types of federal benefits, including Social Security benefits and disability payments. While some retirement benefits, such as pensions, can be garnished, others are exempt depending on state law. Also, unless the debtor owes child support, generally, a maximum of 25 percent of a person's income can be withheld.

Means Testing

In addition to federal restrictions placed on garnishment, many states require that debtors pass a means test before they can have their wages garnished. This means that if a debtor does not make more than a certain amount necessary to purchase basic necessities, such as housing and food, he cannot have his income garnished. Similar means tests are usually applied to debtors who may have their bank accounts frozen. If a person is retired and has no income, his bank account might be ineligible for freezing.

Illegal Garnishment

Under no circumstances is a creditor allowed to garnish the wages of a debtor without first receiving the permission of a court and presenting the employer with a court order. This is a violation of U.S. federal law and prosecutable as a criminal offense. The Federal Trade Commission, which is responsible for protecting consumers, has sought cases against several lenders who attempted to garnish wages directly from debtors' employers, sidestepping the courts.