What to Do if Your Wages or Unemployment Benefits are Garnished

by Lynnette Khalfani-Cox, The Money Coach on June 2, 2011

in Debt


Being unemployed and waiting for that next unemployment check can be stressful. If you’ve fallen behind on some bills and let them slide for more than 180 days, you could be setting yourself up for some serious financial problems ahead.

If a creditor pursues legal action against you for unpaid bills, a court order could lead to wage garnishment. Wage garnishment allows the creditor to take a portion of your paycheck or income, and the amount will be deducted automatically from your bank account.

How to Handle Garnished Wages or Unemployment Benefits

In most circumstances, unemployment benefits are exempt from garnishment so you will not need to worry that creditors will have access to your unemployment income. However, if you were receiving severance pay from your last job, that income may be subject to garnishment.

Keep in mind that the only way for a creditor to garnish your wages is through a court order. This does take time, and you will be notified well in advance that this will be taking place. If you are being sued for debt owed, it’s a good idea to work with a lawyer and get some professional legal advice about the entire process.

Things to Keep in Mind About Wage Garnishment

Some other important things to keep in mind when your wages or severance pay will be garnished:

If you have a joint bank account with a spouse, a creditor may have the ability to take money from your joint account, even if some of the money is from your spouse’s paycheck.

Depositing your unemployment benefits in a separate account may help to protect other accounts you own or are linked to.

Creditors can get a new court order to garnish your wages when you switch employers. If you still have outstanding debts, you need to pay them off as quickly as possible to avoid these creditors from “chasing” you from employer to employer.

If you don’t show up for your court date, the court will grant the creditor the full right to garnish your wages and you won’t have any say in the matter going forward.

When your wages are being garnished, your employer will be fully aware of your current financial situation. In this case, carrying debt and being late on your payments can make you appear irresponsible or untrustworthy.

Once the judgment to garnish your wages has been rendered, you have very few options for stopping the process. By state law, creditors are required to provide you with plenty of lead time about what is about to happen.

When a creditor threatens that they will take you to court about your debt, it’s in your best interest to talk to an experienced attorney immediately. An attorney can guide you through the process and make sure you understand which funds are exempt from garnishment, and what rights you do have.


This Article Answered The Following Money Questions:

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My children’s father just started receiving unemployment in pa. I have 4 children which he pays court order child support for. I haven’t received any money for a month now.
I owed unemployment back in 2005 $500 for an over payment when I lost my car due to a flood (which is now $1000+owed). Unemployment sent letters to take the money 2tax years ago but never took the money owed(its like their trying to built up the money or something)!
I need to know is this legal for unemployment to just take my children’s child support out of their fathers unemployment without any notices and the fact that my income is below poverty level??????????????

Jonathan Morris

I mean seriously, its really the people in the government that have to take this a little more seriously. We are suffering from the decisions of our past leaders and those that surrounded them. They have the solution, but for some reason i feel that there is some type of control they need to have as to maintain their power and make us feel we have to rely on them. These are just my thoughts about the whole unemployment situation.

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