Credit card debt is a growing concern for many individuals. As balances accumulate, missed payments can lead to serious financial and legal consequences. One of the most pressing concerns is whether credit card companies can garnish your wages to recover unpaid debts.
Latest Facts & News
- Credit Card Defaults Surge: In 2024, U.S. credit card lenders wrote off $46 billion in delinquent loans, the highest default rate since 2010, with defaults still rising in 2025.
- Minnesota Updates Wage Garnishment Limits: Starting April 1, 2025, Minnesota revised its wage garnishment exemptions, lowering the percentage creditors can take from disposable earnings.
- Challenging Wage Garnishment: Individuals can contest wage garnishment in court by filing an objection or exemption claim, typically within 5 to 30 days of notice.
If you’ve fallen behind on your credit card payments, you might be worried about creditors taking money directly from your paycheck. But can credit card companies garnish your wages?
In this blog, we will explain when and how credit card companies can garnish your wages, what legal protections you have, and how to prevent it from happening.
What is wage garnishment?
Wage garnishment is a legal process that allows creditors to take money directly from your paycheck to repay a debt. It happens when a court orders your employer to withhold a portion of your earnings and send it to the creditor.
Types of Wage Garnishment
- Traditional Wage Garnishment: A portion of wages is deducted by the employer.
- Bank Garnishment: Funds are seized directly from a debtor’s bank account.
- Tax Refund Garnishment: The IRS or other agencies can intercept tax refunds to satisfy debts.
Wage garnishment is commonly used for unpaid child support, student loans, and tax debts, but can credit card companies garnish your wages? Let’s find out.
Can Credit Card Companies Garnish Your Wages?
The simple answer is yes, but not immediately. A credit card company cannot garnish your wages without first suing you in court and winning a judgment against you.
Conditions for Wage Garnishment:
- The credit card company must file a lawsuit
- A court judgment is required
- The creditor must follow state and federal laws governing garnishment limits
Consequences of Wage Garnishment
- Financial Hardship: Losing a portion of your income can make it difficult to cover daily expenses.
- Credit Score Impact: Wage garnishment may appear on credit reports if a judgment is filed.
- Employer Involvement: Some employers may view wage garnishment negatively.
The Legal Process for Wage Garnishment
Can credit card companies garnish your wages overnight? No, credit card companies need to follow particular procedures specified by law before starting wage garnishment processes.
Here’s what typically happens:
- Default on Payments: A debt will become in default status once you consistently fail to pay your credit card bill for an extended period. The creditor uses telephone communications and written correspondence, along with business relations agencies, to seek debt collection.
- Lawsuit Filing: The creditor may start a civil lawsuit against you when they cannot recover the debt amount.
- Court Judgment: If you do not respond to the lawsuit or lose the case, the court may issue a judgment against you.
- Wage Garnishment Order: Getting a Wage Garnishment Order becomes possible for creditors after they claim the court judgment. The creditor obtains the authority to obtain a portion of your paycheck, which your employer must deliver to them.
Federal Laws Governing Wage Garnishment
Federal laws limit how much money creditors can take from your paycheck. The Consumer Credit Protection Act (CCPA) sets rules to protect workers from losing too much income to garnishment.
Key Protections Under Federal Law→
- Creditors can garnish no more than 25% of your disposable earnings (your paycheck after taxes and deductions) OR the amount by which your earnings exceed 30 times the federal minimum wage, whichever is lower.
- Having just one wage garnishment order will not cause your employer to terminate your employment.
- The garnishment exemption includes veteran benefits, Social Security benefits, and disability payments.
These legal protections ensure creditor rights while preventing excessive financial hardship for debtors.
Can Credit Card Companies Garnish Your Wages in Georgia?
Yes. Georgia law allows credit card companies to obtain wage garnishment, though they need to follow required legal boundaries and steps. The state and federal governmental authorities establish laws that specify wage garnishment procedures to protect debtors from unjust income depletion in Georgia.
Georgia-Specific Wage Garnishment Laws
While federal law provides baseline protection, Georgia law imposes its own limits on wage garnishment. If you live in Georgia, here’s what you need to know:
- Garnishment Limitations: Georgia allows creditors to garnish the lesser of 25% of disposable earnings or the amount that exceeds 30 times the federal minimum wage threshold.
- No Wage Garnishment Without a Judgment: A credit card company must obtain a court judgment before initiating wage garnishment in Georgia because the state does not permit this act without judicial authorization.
- Exemptions for Certain Income Sources: Social Security, unemployment benefits, workers’ compensation, and disability payments are exempt from garnishment under Georgia law.
- Duration of Garnishment: Wage garnishment in Georgia typically lasts up to 1,095 days, after which creditors must refile if they wish to continue collecting the debt.
- Employer Compliance: Employers who fail to comply with a valid wage garnishment order may face legal penalties.
If you’re facing wage garnishment in Georgia, you may have legal options to stop or reduce it.
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Georgia’s Wage Garnishment Limits
| Category | Federal Limit | Georgia Limit |
| Wage Garnishment | 25% of disposable income | 25% of disposable income |
| Social Security | Exempt | Exempt |
| Workers’ Comp | Exempt | Exempt |
| Protection from Employer Retaliation | Yes | Yes |
| Social Security Exemptions | Yes | Yes |
| Time Limit for Garnishment | None | 1,095 days |
How Often Do Credit Card Companies Garnish Wages?
The frequency depends on the number of judgments obtained. Once a judgment creditor has a court order, garnishments continue until the debt is fully repaid or a legal exemption is applied.
Credit card companies don’t garnish wages as frequently as the government does for unpaid taxes or child support. However, it does happen, especially if you:
- Have a large unpaid balance.
- Have ignored debt collection attempts.
- Have assets or steady wages creditors can seize.
When multiple creditors pursue debt collection through garnishment, they can reduce a substantial amount of what their debtor earns.
The likelihood of wage garnishment depends on factors like the size of the debt, the creditor’s aggressiveness, and state laws.
A credit card company can attempt to garnish your wages only after you ignore their collection attempts and legal court actions for an extended period.
How to Protect Your Wages from Garnishment?
If you’re worried about wage garnishment, here are some steps to protect yourself:
- Negotiate with Creditors: Reach out to your creditors to explore a debt settlement. Some creditors are often willing to decrease the size of your debt and arrange easier payment structures.
- Seek Legal Advice: Contact a consumer protection attorney who deals with debt-related legal issues to receive professional assistance. You will gain an understanding of your rights and legal loopholes through their assistance while they help you find possible defensibility.
- File for Exemptions: Wage garnishment cannot be applied to earnings that include Social Security benefits alongside veterans’ benefits and disability payments, since these payments are protected by law. After filing for such exemptions, creditors are prevented from accessing these funds.
- Set Up a Payment Plan: Some creditors provide the option to receive payment structures instead of implementing wage garnishment procedures. Installing a repayment strategy before anything happens allows you to maintain monetary control while avoiding additional legal trouble.
- Challenge the Garnishment: If the garnishment was improperly executed, you can contest it in court. Creditors must follow strict legal procedures, and errors in documentation or excessive garnishment beyond legal limits can be grounds for dismissal.
Alternatives to Wage Garnishment
Here are some of the most effective strategies:
1. Debt Consolidation
The debt consolidation process creates a single loan from multiple debt obligations, giving you access to a reduced interest rate. The consolidation process enables debtors to handle payments better, decreasing the financial pressure from outstanding credit card debts with high interest rates.
2. Credit Counseling & Debt Management Plans
Nonprofit credit counseling agencies provide Debt Management Plans (DMPs) to assist consumers in securing reduced interest rates and systematic payment arrangements. Such agencies will collaborate with your creditors to establish payment plans that fit your budget.
3. Debt Settlement
Debt settlement enables you to seek deals with lenders to pay reduced amounts of money instead of your full debt. This debt settlement method helps, yet it causes financial consequences affecting your credit scores.
4. Hardship Programs
Hardship programs designed for struggling cardholders exist as part of the offerings from certain credit card companies. The relief programs from these companies include payment suspension or reduction, interest rate cuts and fee elimination benefits.
- Eligibility: Requires proof of financial difficulty.
- Temporary Relief: The duration of these relief programs extends between six months and one year, after which regular payments resume.
- Contacting Creditors: The first step is contacting all your creditors before they contact you to assess hardship alternatives.
5. Bankruptcy as a Last Resort
The bankruptcy process releases loans while it shapes debt obligations, creating permanent damage to your credit standing and financial security for years to come.
There are two primary types:
- Chapter 7 Bankruptcy: To settle most unsecured debts, you might need to sell off some assets first.
- Chapter 13 Bankruptcy: It allows debtors to create a debt repayment schedule over a three- to five-year period without exposing their assets to liquidation.
6. Voluntary Repayment Plans with Creditors
Many creditors prefer voluntary repayment agreements over legal action. By proactively contacting them, you may be able to set up a repayment plan that avoids wage garnishment.
- Installment Agreements: Some creditors allow structured repayment plans with lower monthly payments.
- Lump-Sum Settlements: If you have access to savings or a financial windfall, you can negotiate to settle debts for a reduced total amount.
- Interest Rate Adjustments: Creditors may agree to lower interest rates to make payments more manageable.
Your Rights During the Wage Garnishment Process
Even if a court orders wage garnishment, you still have rights.
- Receive a notice before garnishment begins.
- Contest the garnishment in court.
- Claim exemptions for protected income.
- Request a modification if the garnishment creates severe hardship.
- Verify the authenticity of the debt before garnishment is approved.
If you believe your wage garnishment is unfair, contact a lawyer immediately.
Take Control of Your Income with Bowes and Sullivan Tax Group
Credit card companies can garnish your wages if they win a lawsuit against you, but you have options to protect yourself. That’s where Bowes and Sullivan Tax Group come in.
Bowes and Sullivan Tax Group is a trusted financial and tax consulting firm specializing in debt relief, tax planning, and legal strategies to protect your income. Our expert team helps you navigate debt, negotiate settlements, and create smart tax strategies to keep more of your hard-earned money.
Whether you’re facing wage garnishment, tax debt, or financial uncertainty, their team of experienced professionals provides tailored solutions to help you regain control. If you’re wondering, “Can credit card companies garnish your wages?”, don’t wait until it’s too late.
Contact Bowes and Sullivan Tax Group today and take control of your financial future!
Frequently Asked Questions
How long can a credit card company garnish my wages?
A credit card company can garnish your wages until the debt is fully paid off, including interest, court fees, and collection costs. However, state laws may limit the duration or amount taken from each paycheck.
Can credit card companies garnish my wages without notifying me?
No, they must first sue you, win a court judgment, and obtain a wage garnishment order. However, once the order is approved, your employer may deduct wages without additional notice.
What types of income are exempt from wage garnishment?
Certain types of income, such as Social Security, disability benefits, and veterans’ benefits, are generally protected from wage garnishment. However, exemptions vary by state, and some protected funds could be at risk if mixed with other income.
Can I stop wage garnishment by filing for bankruptcy?
Yes, filing for bankruptcy triggers an automatic stay that immediately halts wage garnishment. Depending on the type of bankruptcy you file, some or all of your debts may be discharged, permanently stopping the garnishment.
How does wage garnishment affect my credit score?
A wage garnishment itself won’t appear on your credit report, but the missed payments leading up to it will. Defaulting on your credit card debt and having a court judgment against you can significantly damage your credit score, making it harder to get loans in the future.
