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MAY 17, 2012

Indiana Garnishment Rules

What are Indiana's wage garnishment rules?

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Bill's Answer: Bills.com Resident Expert

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.

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.

I hope this information helps you Find. Learn & Save.

Best,

Bill

Bills.com

Comments (20)


Noah F.
Fort Wayne, IN  |  March 20, 2012
I'm paid every two weeks, and my hours are different from week to week. I may work 40hours one week but only 22hours the next. I would have 62 hours on my pay check,for two weeks of work but they have to Garnish it weekly, correct?
Bills.com
March 21, 2012
Consult with an Indiana lawyer who has employment law experience for a precise answer to your question. I read Indiana's law to mean that the amount garnished must be calculated based on the person's weekly wages. When the person is paid — weekly, every two weeks, or twice a month — is irrelevant. Therefore, the garnishment amount would vary as your hours worked vary.

I hasten to add that I am not an Indiana employment lawyer, and my interpretation of Indiana's statute may be completely contrary to Indiana case law. Again, consult with an Indiana lawyer for a better guess.
Tim A.
Valparaiso, IN  |  March 16, 2012
I have child support coming out of my check here in Indiana, I have someone threatening to garnish my wages. can they garnish for both child support and a bill?
Bills.com
March 16, 2012
It is possible to have more than one garnishment. The general rule of 25% limit on your income is not always applicable when dealing with child support garnishments. To receive a precise answer, I recommend that you consult with an attorney who has experience in your state's labor law.
Robert W.
Kendallville, IN  |  February 18, 2012
I just got my bank account frozen! The majority of the deposits are from unemployment benefits which are protected from garnishment. Is this legal? Can I sue the fellow who filed for it for what he's cost me?
Bills.com
February 19, 2012
When a bank account's funds are frozen, they are held by the bank for a short period of time before the bank remits then to the judgment creditor. I advise you to contact your bank ASAP. If you can prove to them that the funds in the account are strictly from your unemployment compensation, then I believe they will not remit them to the creditor.

You can speak with a lawyer to see if the creditor violated any laws by levying your account. It is my opinion (and only an opinion, as I cannot give you legal advice) that the creditor did not break the law, but only an attorney can give you an authoritative answer.
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Robert W.
Kendallville, IN  |  March 21, 2012
Thanks, it is pretty tricky question. All states are required to conform to federal law, and Indiana's law is virtually verbatim with the federal law. The interpretation of the phrase "until such benefits are actually received" in both Indiana and federal statutes is what is causing the problem. My contention is this phrase means what garnishments are allowed can't be paid until said benefits are approved, the magistrate is interpreting to mean once you receive them, they can take them. I've decided to leave it up to the Dept of Labor. I think the attorneys want to make a test case of it, and I don't have the resources to fight them through the different levels of the judicial system.
Bob H.
Plymouth, IN  |  January 06, 2012
In Indiana, garnishment can only be enforceable on a weekly income over $217.50 , that is 30 hrs X $7.25 (the current federal minimum wage). Weekly take home pay of $217.50 or less is exempt and cannot be garnished by Indiana law.
Bills.com
January 06, 2012
You illustrated IC 24-4.5-5-105 accurately. Thank you!
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Carol R.
Goshen, IN  |  May 17, 2012
Thanks for this info. My son, who is working aprox 20 hrs a week @ min. wage ( he is thankful to be working at least this much) and has a garnishment of $60 a week taken out. To say the least he has no money left in a paycheck. In one of my college classes I read that 25% was the max. in Indiana and I couldn't understand how they could be taking so much EVERY week. We will definately look into this further. Thanks again for your breakdown. CJ, Northern Indiana
Bills.com
May 18, 2012
It does not sound like he makes enough to be garnished. He should be able to contact his HR department and get the garnishment stopped. The negative impact of not paying on the debt, however, is that it will grow with interest.

If he is going to continue earning at a level that is protected from garnishment, that may give him some leverage to negotiate a reduced, lump-sum settlement, even post-judgment.
ELLIOTT S.
Indianapolis, IN  |  November 16, 2011
I am currently getting garnished for a judgement on an apartment that I used to live in with someone else. I was wondering if a judgement on an apartment can or is allowed to tack on interest to the principal balance owed?
Tiffanie M.
Crown Point, IN  |  November 15, 2011
We've fallen on hard times like most but my husband has gotten a better job and we are making payments. I have 2 questions. 1 A bill that's gone to collection threatens wage garnishment even though they are cashing our payments to them monthly, can they garnish? 2 Will we have the opportunity to go to court to explain they are being paid or is a judgement just done on our wages?
Bills.com
November 16, 2011
Yes, even though you are currently making payments, you may have arrears due to incomplete or partial payments. In that case the creditor can seek to pursue collections that can lead to garnishment of your wages.

If you feel that you a garnishment or other action will be taken against you, then speak to the creditor and negotiate a payment plan to pay off the debt.

If it is not an administrative wage garnishment, then you will have an opportunity to make your case in court.
Ashley M.
South Bend, IN  |  November 11, 2011
My fiance lives in Indiana but works in Michigan. He recently got papers sent to his place of employment for garnishment for a vehicle he had repossessed. Since his wages will still be garnished at tax time for 2012 is the creditor allowed to take his federal/state tax return?
Bills.com
November 14, 2011
A garnishment on tax returns can be made by the government and also in cases of delinquent federal student loans or child support. This is called administrative garnishment. A judgment-creditor may not garnish tax returns, but could levy the bank account, and any deposited funds (including a tax return) could be frozen.
Joyce T.
Lincoln, NE  |  November 02, 2011
I have an employee in Michigan who had a garnishment from Indiana when he was employed with us in 2007-2009. He has rehired and Indiana sent me the original paperwork to withhold. Is there an expiration on Indiana garnishments? Should I withhold or do they need to re-file? Thanks.
Bills.com
November 02, 2011
I can't give legal advice, as only an attorney can do so, but here is my non-legal opinion.

Your obligation to garnish never ceased, but was no longer relevant when he stopped working for you. I believe that you are obligated to withhold money and that Indiana does not need to refile.

It is not clear what kind of debt is owed. There may be a time when the debt legally expires, depending on the type of debt and how old it is. I suggest you contact the authority listed on the paperwork or speak with an attorney.
Jennifer A.
Indianapolis, IN  |  October 11, 2011
My husband is currently being garnished. And the same company is trying to garnish my wages for the EXACT same thing can they do that?
Bills.com
October 12, 2011
It can be the case that a creditor can garnish both spouses for the same debt at the same time. It may require the court's approval, in some jurisdictions.

I don't see anything in the Indiana Code that precludes both of you being garnished. I recommend that you speak with an attorney in Indiana, in order to get an authoritative answer from someone who is legally allowed to dispense legal advice, which I am not.
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