Stop Wage Garnishment in New York: Your Complete Guide

If you lost a debt collection lawsuit and have a job, creditors can take money directly from your paycheck. You have options to stop them.

In late 2022, New York passed a law preventing non-profit hospitals from garnishing wages. Thousands of New Yorkers received relief from crushing medical debt.

Despite the new law (S.6522A/A.7363A), other creditors can still seize your wages to satisfy money judgments. Most must obtain an income execution order from the court first.

You can stop or avoid wage garnishment as a New York resident. Here’s how.

New York Law Limits Wage Garnishment Amounts

N.Y.C.L.P.R. § 5231 protects you from excessive wage garnishment.

Only 10% of your gross income or 25% of your disposable income can be garnished per payment period. The amount cannot exceed 30% of the minimum hourly wage.

Multiple creditors garnishing wages simultaneously must still leave you with at least 30%. The most recent garnisher waits until you pay off the first one.

Family and public debts have higher limits. Up to 50% of your earnings can go to spousal or child support if you support another spouse or child. If not, 60% can be garnished.

New York’s minimum wage varies by location. Most cities require $13.20 per hour. Long Island, New York City, and Westchester require $15 per hour.

Understanding how wage garnishment works helps you handle it better.

Understanding the Wage Garnishment Process in New York

Your wages may be garnished to pay back taxes, child support arrears, defaulted student loans, and mandatory employment benefits.

Most unsecured credit providers need a monetary judgment and court order to withhold income. The process follows these steps:

1. The creditor files a lawsuit against you.
2. The creditor obtains an income execution order.
3. The creditor sends the notice to the city marshall.
4. The marshall serves you the papers.
5. You may set up a voluntary payment plan.
6. The marshall serves your employer the garnishment paperwork.
7. Garnishment starts with your next paycheck.
8. The marshall sends you updated statements.

Creditors must sue you and win before garnishing your paycheck. Knowing how to defend yourself in a debt lawsuit is crucial.

Respond to Your Debt Lawsuit to Avoid Wage Garnishment

When a creditor sues you for debt, you receive a Summons and Complaint. These documents contain important deadlines for filing your Answer.

File your response on time. It takes three steps:

1. Respond to each claim in the Complaint document. State whether you agree, deny, or don’t understand each claim.
2. Assert your affirmative defenses. These are legal reasons demonstrating why you shouldn’t be held liable.
3. File your Answer at court. Send a copy to the plaintiff or their attorney.

Our partner Solo can help you respond to your debt lawsuit quickly and correctly.

Prevent Wage Garnishment Through Debt Settlement

Debt settlement helps you prevent wage garnishment before it starts.

In a settlement, you offer your creditor a portion of the total amount due. Usually at least 60% of the debt’s value.

In exchange for a lump-sum payment, the creditor drops its legal claims. They release you from the remaining balance.

Creditors often negotiate if you promise a lump-sum payment within a short period. Debt settlement works best if you have cash saved or expect money soon.

Settling your debt helps you avoid a judgment and wage garnishment. You’ll save money and move forward.

Get the settlement terms in writing. Pay the creditor before your court date.

Our partner Solo makes settling debt easier. The software helps you send and receive settlement offers until you reach an agreement. After an agreement is reached, you get help managing settlement documentation and payment transfers. Your financial information stays private and secure.

How to Stop Wage Garnishment in New York

Stopping wage garnishment in New York is straightforward in some situations.

Request the Court to Vacate the Judgment

If you didn’t receive court papers and the court entered a default judgment, you can request to vacate it. If the judge accepts your request, garnishment stops. The creditor may return money already taken from you.

Be prepared to defend yourself in court. You may also file an Order to Show Cause. The court can lower the amounts if you cannot afford to lose that much income.

File for Chapter 7 Bankruptcy

Bankruptcy places an automatic stay that immediately stops debt collection lawsuits and wage garnishment. An automatic stay halts all collection actions against you.

Filing bankruptcy gives you a fresh start. You can discharge unsecured debts and stop creditors from taking your paycheck.

Apply for Exemption

Some of your earnings are exempt from garnishment. You must keep at least 30% of the minimum wage. You must take home at least 30 times the minimum hourly salary each week.

Hospitals cannot garnish your wages to pay medical bills. Some exemptions require that you apply for them.

Exempt income includes:

• Unemployment benefits
• Disability benefits
• Worker’s compensation
• Court-ordered spousal support you receive
• Social Security or Veterans Affairs payments
• Court-ordered child support

No creditor can take such income to pay debt.

The best defense against wage garnishment is filing your Answer to a court Summons before the deadline. If a creditor already garnishes your paycheck, you can challenge any exempt wages they withheld illegally. You may also request to vacate the judgment or file for bankruptcy.

Settling your debt is the best way to avoid wage garnishment. It gives you a financial reset.