Trying to pay off debt can be stressful and difficult. If you’ve fallen behind on your payments, there’s a risk that your creditor may use wage garnishment to collect the debt. Understanding New York wage garnishment laws can help you navigate this challenging situation.
Wage garnishment, also known as income execution in many states, including New York, occurs when an employer withholds a portion of your paycheck for creditors. That money then goes towards your debt repayment.
Your wages might be garnished if you’re delinquent on your student loans, credit card debt, or even court-ordered child support payments. Different types of debt are subject to different wage garnishment laws, so seeking legal advice from an attorney or lawyer is important.
How Does Wage Garnishment Work in New York?
In New York state, a creditor can garnish your wages if they sue you in court, win, and a judgment—or a court’s final decision—is entered against you. However, depending on the type of debt, a creditor can garnish your wages without suing you in court.
What Can Wages Be Garnished for in New York?
If you have public debt—which includes unpaid taxes, student loans, or child support payments—your wages can be garnished without a court order.
On the other hand, if you have a private debt—from credit cards, medical bills, or private student loans—the creditor must first sue you. Then, if the court rules in favor of the creditor, a judgment may be issued against you, and your wages may be garnished.
In this case, the creditor is known as a judgment creditor, and the person who owes the creditor is the judgment debtor.
In New York City, the city marshal is responsible for wage garnishment.
Maximum Allowable Garnishment Amount
There are state and federal laws regarding wage garnishment. Thankfully, New York state has lower wage garnishment limits than federal wage garnishment laws dictate.
In New York, up to 10% of your gross income or 25% of your disposable earnings, whichever is less, may be garnished. Disposable earnings refers to income left after deductions such as federal, state, and local income taxes and Social Security taxes.
Protections and Exemptions for Debtors
Your entire paycheck, however, can’t be garnished. After your wages are garnished, you must be left with a paycheck (after deductions are taken out) at least 30 times the federal or state minimum wage.
If you earn 30 times the minimum wage or less, your wages cannot be garnished at all.
Note that the amount of money that can be garnished varies by type of debt, so these limits only apply to private debt.
For example, for federal student loan debt, up to 15% of your disposable income can be garnished, according to the Department of Education. Again, you must have at least 30 times the minimum wage left over.
For child support or alimony, 50% of a worker’s disposable income can be garnished if they’re supporting another spouse or child or up to 60% if they’re not. Furthermore, if their payments are 12 weeks or more in arrears (or late), an additional 5% can be garnished.
If you owe back taxes or tax debt, the IRS will determine how much to garnish from your paychecks based on your family size and income.
Additionally, your employer may not fire you or refuse a raise or promotion because you have one income execution against you. If, however, you have more than one income execution, this does not apply.
And employers can’t garnish every source of wages from debtors. Members of the armed forces and Social Security beneficiaries are subject to different rules.
How Long Does Wage Garnishment Last?
Your employer will continue to garnish your wages until you either pay off the debt completely or leave your employer, or another court order ends the withholding.
In New York State, the statute of limitations on judgments is 20 years. A debt collector cannot start to garnish your wages after this has expired. However, the creditor can garnish you at any time during that time.
What Happens After A Debt Collector Has Sued You?
If a debt collector or creditor sues you, you must respond to the debt collection lawsuit. Otherwise, a default judgment may be issued against you.
The result of not responding to a lawsuit and getting a judgment placed against you may be that you are now indebted for the entire amount the creditor claimed, plus potential attorney fees and other fees. You may then be required to pay back the unpaid debt. You have a better shot at disputing the debt or reaching a settlement with the debt collector if you respond to the lawsuit promptly to avoid the judgment and large balance owed to your creditor.
How Long Do You Have Before Your Wages Are Garnished?
Your time before your wages are garnished varies depending on whether you have public or private debt.
For example, if the creditor wins the case in City Court and a judgment is issued against you in New York, the creditor will contact you to collect the judgment. If you fail to pay the judgment within 30 days, the creditor may file an income execution to start garnishing your wages.
Debtor’s Rights and Responsibilities
Even after a creditor has a wage garnishment order against you, you might still be able to stop the garnishment. You can file an objection or request a hearing with the court that issued the garnishment.
Typically, this involves presenting evidence that the garnishment is causing undue financial hardship, that your income is exempt, or that the debt is invalid. Another option that debtors have is to file for bankruptcy, which can cease garnishment for some.
If the court does not rule in your favor, an income execution will be sent to your local sheriff or marshal. The sheriff then has twenty days to serve you (the judgment debtor) with the income execution.
Suppose you fail to make voluntary payments to the sheriff or marshal within twenty days after you’re notified of the income execution. In that case, the income execution is passed on to your employer in the second stage of garnishment, who will then deduct a percentage of wages each paycheck. Some employers may notify their employees that their wages will be garnished.
Note that the sheriff or marshal will also add a poundage fee to the judgment amount to collect the funds for garnishment.
Legal Resources for Affected Individuals
If you cannot pay off your debt and your wages are at risk of being garnished, consider seeking legal help.
Disputing a wage garnishment order can be challenging—you’ll want to know federal and state laws and keep track of multiple deadlines and requirements for filing an objection or attending a hearing. A debt help lawyer can help you negotiate, file for bankruptcy, or take your case to court.
At Tayne Law Group, our attorneys have years of experience dealing with these issues, so you won’t have to do all the work. You can receive a free phone consultation by calling (866) 890-7337 or completing this short contact form. We never sell or share your information. All calls are confidential.
