In general, creditors look to wage garnishment as a debt collection method as a last resort. Even so, creditors can and do get writs of garnishment against those who have no other available assets by which to pay their debts. Sometimes, consumers fall behind on multiple debts, in which case it is possible for multiple creditors to seek garnishment orders against the consumer at the same time.
General Rule
Multiple creditors can file lawsuits against you that may result in the creditors filing writs of garnishment. However, as explained by Bills.com, because state and federal limitations exist on how much can be garnisheed from your wages, creditors may have to agree with each other to garnishee less than the maximum allowed, or wait for one debt to be resolved before they can start receiving some of your wages.
Consumer Credit Protection Act, Title III
The primary federal law dealing with wage garnishment is the Consumer Credit Protection Act. Title III of this act limits the amount of money creditors can take from your wages to 25 percent of your disposable earnings. Alternately, creditors may take up to the amount by which your disposable income is greater than 30 times the current federal minimum wage. Different rules apply if your wages are being garnished for child support, bankruptcy or tax payments. Usually, the limit for these payments is 50 percent, but with child support, the amount can be up to 65 percent, depending on how delinquent you are on the child support and whether you're already supporting another child.
State Laws
Each state has its own limits on how much creditors can take from your wages. In many cases, these limits mirror the federal guidelines, but some states have limits below those stipulated in Title III. This means that it may take multiple creditors longer to settle your delinquent accounts in some states than in others.
The Two Scenarios
If two or more creditors get a writ of garnishment against you, typically, creditors are paid via garnishment according to the order in which the writs were issued. This way, one creditor can get up to the maximum amount allowed by state laws and Title III. However, creditors also may agree to split the maximum allowed. For instance, if using Title III guidelines, each creditor may garnishee 12.5 percent. The method you select doesn't necessarily change how fast you eliminate the total debt, depending on the amount of the debts and the interest rates involved, but with sequential payment, because you throw the total amount allowed at a single creditor, that account will show as closed on your credit report sooner than if you split the maximum. The elimination of a debt sometimes looks better to creditors than paying on multiple debts that are still active.
Loss of Employment
An important consideration regarding multiple wage garnishments is that your employer cannot fire you for a single garnishment order. This protection does not apply to you if you have multiple garnishment orders, however. Thus, it's beneficial to contact creditors with whom you have subsequent delinquent accounts and arrange payment plans outside of the court.
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