Indiana Garnishment Rules

What are Indiana's wage garnishment rules?

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Bill's Answer: Answered by Mark Cappel

The most common method used by judgment-creditors to enforce judgments is wage garnishment, in which a judgment creditor would contact the debtor’s employer and require the employer to deduct a certain portion of the debtor’s wages each pay period and send the money to the creditor. However, several states, including Texas, Pennsylvania, North Carolina, and South Carolina, do not allow wage garnishment for the enforcement of most judgments. In several other states, such as New Hampshire, wage garnishment is not the “preferred” method of judgment enforcement because, although possible, it is a tedious and time consuming process for creditors.

In most states, creditors are allowed to garnish between 10% and 25% of your wages, with the percentage allowed being determined by each state. Administrative wage garnishment is not subject to the same rules, however. Wages may be garnished for student loans, child support and alimony in amounts greater than 25%. 

In Indiana, wage garnishment is allowed under Indiana Code Title 34, Article 25, Chapter 3: Garnishment, and IC 24-4.5-5-105, and federal law 15 U.S.C. 1673(a). If the judgment-creditor is aware of the debtor’s place of employment, it may seek wage garnishment. Under federal law, the garnishment applies to 25% of the debtor’s net take home pay, (i.e., gross pay less statutorily mandated deductions). Garnishment can occur only after the person being garnished has received a 10-day’s notice. Indiana allows wage garnishment of up to 60% for child support, but limits that amount if the debtor is a head of household supporting others.

Garnishment of Social Security benefits or pensions for consumer debt is not allowed under federal law.

Your Question

Consult with your employer’s legal counsel regarding the application of Indiana and federal employment law. In general, creditors must stand in line when a wage garnishment hits the 25% ceiling. However, if the wage garnishment is administrative and relates to federal student loans, a child support order, or alimony, then the 25% limit does not apply. Again, each state’s laws vary, and an attorney with experience in your state’s labor law will give you precise advice.

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Comments (42)

Donna M.
Evansville, IN  |  March 03, 2014
Can I be garnished for a loan that was clearly stated in divorce decree that I am not responsible for this debt? How can I remove this garnishment?
March 04, 2014
Yes, you can be garnished for a debt that your divorce decree said was the responsibility of your ex to pay. The creditor is not bound by the terms of our divorce decree. If you are financially responsible for a debt to a creditor that goes delinquent, then you can suffer all collection efforts. You may have a cause to take action against your ex, for not adhering to the terms of the decree. Check with your divorce lawyer.
Mary F.
Lafayette, IN  |  February 03, 2014
Can long term disability be garnished in Indiana? My husband receives long term disability and a judgement creditor (credit card company) sent a garnishment order to his former employer. I thought those assets were exempt.
February 05, 2014
Take these two steps:
  1. Read Indiana Code section 24-4.5-5-105 (1) (a), which defines what Indiana courts allow judgment-creditors to garnish. My interpretation of the plain language in the statute tells me the Indiana legislature intended courts to allow garnishment of wages, and not insurance benefits.
  2. Consult with an Indiana lawyer who has consumer law experience to learn if my interpretation is collect.

If you cannot afford a lawyer, contact Indiana Legal Services or another Indiana pro bono program for no-cost legal assistance.

Amanda R.
Indianapolis, IN  |  December 24, 2013
can a realiter garnish a person when the case has been closed and how long can they take from a paycheck
December 26, 2013
I don't know what you mean when you say the case has been closed. A retailer could not garnish a person's income without first suing and obtaining a judgment against him or her. How long a judgment stays in effect is based on the collection laws of the state that has jurisdiction. If a judgment were entered, it is certainly possible that a wage garnishment would stay in effect until the debt was paid off.
Mindie C.
Fort Wayne, IN  |  December 02, 2013
Is your employer allowed to charge a pre-paycheck garnishment fee?
December 02, 2013
In Indiana, an employer is allowed to charge the employee and the judgment-creditor a fee for wage garnishments. Here are the rules (found in IC 24-4.5-5-105) for wage garnishments not related to child support:
An employer who is required to make deductions from an individual's disposable earnings pursuant to a garnishment order or series of orders arising out of the same judgment debt (excluding a judgment for payment of child support) may collect, as a fee to compensate the employer for making these deductions, an amount equal to the greater of twelve dollars ($12) or three percent (3%) of the total amount required to be deducted by the garnishment order or series of orders arising out of the same judgment debt. If the employer chooses to impose a fee, the fee shall be allocated as follows:
   (a) One-half (1/2) of the fee shall be borne by the debtor, and that amount may be deducted by the employer directly from the employee's disposable earnings.
   (b) One-half (1/2) of the fee shall be borne by the creditor, and that amount may be retained by the employer from the amount otherwise due the creditor.
The deductions made under this subsection for a collection fee do not increase the amount of the judgment debt for which the fee is collected for the purpose of calculating or collecting judgment interest. This fee may be collected by an employer only once for each garnishment order or series of orders arising out of the same judgment debt. The employer may collect the entire fee from one (1) or more of the initial deductions from the employee's disposable earnings. Alternatively, the employer may collect the fee ratably over the number of pay periods during which deductions from the employee's disposable earnings are required.

Other states allow different fees.

Consult with a lawyer who has consumer law experience to learn more about Indiana's wage garnishment rules. If you cannot afford a lawyer, call your county bar association and ask for the names of the organizations that provide no-cost legal services to people with low or no income in your area. Make an appointment with one of the organizations, and bring all of the documents and letters you have regarding the debt and wage garnishment to your meeting. The lawyer you meet will advise you accordingly.

Jane D.
Richmond, IN  |  November 18, 2013
If someone makes an average of $112 a week (net), how much can they be garnished? They are a college student.
November 19, 2013
That income level is below the amount that is subject to garnishment. The judgment-debtor could be subject to a bank levy, once a judgment is in place, depending on the collection laws of the state.
Brandon O.
Indianapolis, IN  |  November 12, 2013
I received an insurance payment to fix my car after someone else damaged it, and it is being held in my bank account. I'm being sued over $1,500 medical debt and I want to know if I can protect the $1,200 in my account, as it needs to be used to fix my vehicle which is exempt under the $9,350 personal property exemption. Can they still take my insurance payment even though it is to cover a loss on my exempt property?
November 12, 2013
Any amount greater than the account levy (sometimes called account garnishment) exemption amount is vulnerable to levy, after a judgment is entered against you. Does the medical debt creditor have a judgment against you? If you are being sued now, and a judgment hasn't been entered, no levy can take place. If one is entered, go to your bank or credit union immediately and withdraw the cash you need to repair your vehicle.
Tee J.
Indianapolis, IN  |  November 11, 2013
My debt was from 1994 and my wages are being garnished now in 2013. Can they do that?
November 11, 2013
It is possible for a debt from 1994 to result in a garnishment today. Judgments in Indiana generally last 20 years. When were you sued and when was the judgment issued?
Wayne O.
Syracuse, IN  |  February 01, 2013
Can the state take more than 25% if all you have is social security income?
February 01, 2013
It is not possible to answer your question without knowing more about the debt. Is it tax related? A child/family/spousal support garnishment? State-backed student loan? A state court-issued judgment?

Social Security benefits are protected from some forms of garnishment, but open to others. See the article Social Security Garnishment to learn the federal laws in place that protect Social Security benefit recipients.
Christine F.
Fort Wayne, IN  |  October 15, 2012
I'm an independent contractor, not an employee. Can my wages still be garnished?
October 15, 2012
The answer to your question depends on your circumstances. See the 2007 Indiana Appeals Court decision Indiana Surgical Specialists v. Helen Griffin and MDS Courier Service, Inc. (PDF) for a discussion of this issue. Consult with an Indiana lawyer who has employment law experience to learn if your facts match those argued in the case cited, or if there are other Indiana cases that apply to you.
Daniel R.
Fort Wayne, IN  |  October 12, 2012
How much can be garnished to pay a student loan?
October 12, 2012
The answer to you question depends on your disposable income and whether your student loans are federal or private. See the article Student Loan Wage Garnishment for an explanation. Take a moment to read some of the comments on that page, which go into depth about common student loan wage garnishment issues.
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