Can I Have Garnishment Reduced for Hardship?

A wage garnishment requires employers to withhold a specified portion of a worker's income to repay a debt. Garnishments are usually the last step that creditors and others take to recoup debts after previous attempts to collect them. It's better to negotiate with a creditor to avoid a garnishment than to try to reduce a garnishment you can't afford to pay.

Garnishment Limits

The U.S. Consumer Credit Protection Act places limits on the amounts that creditors and others may garnish from workers' wages. Therefore, you have to show why you couldn't afford a garnishment even with those limitations in place. For example, a creditor can't seize more than 25 percent of a worker's disposable income to recoup an unpaid credit-card debt. Your disposable income is the take-home pay you receive after tax deductions. States may require even lower garnishment limits, which supersede limits set by the Consumer Credit Protection Act. Your state's labor department has information on local garnishment limits.

Disputing Garnishments

You may dispute a garnishment, but you need a valid reason for doing so. Financial hardship is an acceptable reason for filing a dispute if you show that a garnishment would hamper your ability to pay for rent and other necessities. Dispute a garnishment issued by a court by contacting the court to request a hearing. You need to present evidence of your expenses at the hearing to show why a garnishment would create a financial hardship for you. A creditor may stop, reduce or leave your garnishment in place, following a decision at the hearing.

Government Garnishments

Garnishments issued to recover payments for federal taxes and student loans don't require a court order, but you may still try to get a garnishment reduced due to financial hardship. For example, the U.S. Department of Education may garnish up to 15 percent of your wages for defaulting on a student loan. The department must notify you 30 days before a garnishment begins and tell you how to request a hearing on the matter. You may request a hearing and present evidence to show a garnishment would create a financial hardship for you, and the department decides whether to reduce the garnishment amount.

Considerations

Certain financial hardships are too big to overcome, even under a reduced garnishment order. In such cases, filing bankruptcy stops court-ordered garnishments while a court assesses the situation, according to the Credit Union National Association. A Chapter 7 bankruptcy calls for the discharge of commercial debts, such as credit card bills. Tax and child-support payments and student loans can't be included. A Chapter 13 bankruptcy puts your debts into a repayment plan that isn't subject to wage garnishment.