Stop Wage Garnishment in South Dakota: Your Rights and Options

You can lose up to 20% of your disposable income weekly to wage garnishment in South Dakota. Few people can survive with such a significant chunk missing from their paychecks. The good news? You have legal options to stop or reduce wage garnishment before it drains your bank account.

Discovering that creditors can take your hard-earned money is stressful. Learning that your employer now knows about your financial troubles makes it worse. But South Dakota law provides protections and solutions that can help you fight back.

Understanding your rights under South Dakota law is the first step to stopping wage garnishment.

South Dakota Wage Garnishment Laws Protect You

South Dakota Codified Laws Chapter 21-18 governs wage garnishment in the state. These laws apply to consumer debts like credit cards, medical bills, and personal loans.

How Much Can Creditors Take?

Creditors can garnish the lesser of two amounts:

• 20% of your weekly disposable income
• The amount your disposable income exceeds 40 times the minimum hourly wage ($10.80 as of January 2023) minus $25 for each dependent family member

Disposable income means what remains after required deductions like taxes and Social Security.

Who Can Garnish Your Wages?

Only creditors with a court judgment can garnish your wages. The creditor must sue you and win first. Original creditors, debt collectors, and debt buyers can all garnish wages after obtaining a judgment.

If you’re facing a lawsuit, our partner Solo can help you respond and defend yourself in court.

Where Does the Money Go?

Your employer withholds the garnished amount from your paycheck. They send it to a levying officer like the Sheriff or Marshall. The officer then delivers the money to the judgment creditor.

What Income Is Protected?

South Dakota exempts certain income sources from garnishment:

• Social Security benefits
• Welfare payments
• Child support received
• Money needed for immediate family necessities (rent, food, clothing, medical expenses)

You must prove your need for exemptions in court.

When Does Garnishment Begin?

Your employer waits ten days after receiving the garnishment notice. They begin withholding money from your next paycheck after that waiting period.

Will You Receive Notice?

Yes. Creditors must notify you before starting wage garnishment. You should receive paperwork explaining the garnishment before it begins.

Four Ways to Stop Wage Garnishment in South Dakota

You’re not powerless against wage garnishment. South Dakota law gives you several options to stop or reduce it.

1. Challenge Unlawful Garnishment

You can object if the garnishment is illegal or incorrect. Valid objections include:

• Mistaken identity (the debt isn’t yours)
• Already paid the debt in full
• Fraudulent debt
• Incorrect debt amount

You can also file a motion to vacate the underlying judgment. Garnishment continues while the court decides, but you can recover seized money if you win.

Need help responding to a debt lawsuit? Our partner Solo provides step-by-step guidance to fight back in court.

2. Negotiate a Settlement or Payment Plan

The garnishment order gives creditors leverage, but negotiation remains possible. You might settle the debt for less than you owe. You could also propose a direct payment plan that keeps your employer out of it.

Always get settlement agreements in writing. Notify all parties immediately to stop the garnishment once you reach an agreement.

3. File for Additional Exemptions

Beyond standard exemptions, you can request protection for money needed for basic needs. Request a court hearing to explain your financial hardship. Show why you cannot afford the garnishment amount.

Bring documentation to support your claims:

• Pay stubs
• Rent or mortgage statements
• Utility bills
• Medical expenses
• Proof of dependents

The court may reduce the garnishment amount if you prove genuine need.

4. File for Bankruptcy Protection

Bankruptcy immediately stops wage garnishment through an automatic stay. The stay halts all collection efforts the moment you file. Calls, letters, lawsuits, and garnishments must stop.

Chapter 7 bankruptcy can discharge eligible debts entirely. Chapter 13 creates a manageable repayment plan. Both options stop wage garnishment and give you breathing room.

Bankruptcy has serious consequences for your credit. Consult with a bankruptcy attorney before deciding. The South Dakota Attorney General provides a consumer handbook with additional resources for financial health.

Prevent Wage Garnishment Through Debt Settlement

Paying the debt before judgment prevents garnishment entirely. If you pay before your court date, the creditor must dismiss the lawsuit. No judgment means no wage garnishment.

Most people don’t have money available for full repayment. Debt settlement offers an alternative solution.

How Debt Settlement Works

You offer the creditor a lump-sum payment for less than the full debt. The creditor agrees to dismiss the case and forgive the remaining balance. You get debt relief without a judgment on your record.

Creditors often accept settlement offers to avoid court costs and collection hassles. You benefit by avoiding garnishment and paying less than you owe.

Settlement Timing Matters

Settle before the creditor wins a judgment for the best results. Once garnishment starts, creditors have less incentive to negotiate. They’re already getting paid through automatic wage deductions.

Act quickly when you receive a lawsuit summons. You typically have 21 to 30 days to respond to the complaint.

Respond to Debt Lawsuits to Avoid Garnishment

The best defense against wage garnishment is responding to the debt lawsuit. Many people ignore lawsuits, leading to default judgments and automatic garnishment.

You must file an Answer with the court within the deadline stated in your summons. Your Answer addresses each claim in the creditor’s complaint. You can raise defenses and demand proof of the debt.

Responding forces creditors to prove their case. Many debt collectors lack proper documentation. They may dismiss the lawsuit rather than fight in court.

Our partner Solo helps you create a legally sufficient Answer in minutes. The platform asks simple questions and generates your court response automatically.

Know Your Rights Under Federal Law

Federal law provides additional protections beyond South Dakota statutes. The Consumer Credit Protection Act limits how much creditors can garnish nationwide.

Federal limits protect the greater of:

• 75% of your disposable earnings, or
• 30 times the federal minimum wage per week

When state and federal limits differ, the law giving you more protection applies. South Dakota’s 20% limit is more restrictive than federal law for most workers.

Federal law also prohibits employers from firing you because of a single wage garnishment. Multiple garnishments remove this protection.

Take Action Before Garnishment Starts

Don’t wait until creditors start taking your paycheck. You have more options before a judgment than after.

Review all debt collection letters and lawsuit papers immediately. Calculate your response deadline and mark it on your calendar. Missing deadlines gives creditors an easy default judgment.

Explore settlement options early in the process. Creditors negotiate better terms before spending money on court costs. Our partner Solo can help you negotiate and settle debts before they reach the garnishment stage.

Gather financial documents showing your income and expenses. You’ll need these records whether you negotiate settlement, file for exemptions, or consider bankruptcy.

Understand your rights under South Dakota law. Knowledge helps you make informed decisions about your best path forward.