Garnishment Laws by State: Wage and Bank Account Rules Compared

Garnishment is a court-enforced process that allows a judgment creditor to collect money directly from a debtor’s wages or bank accounts. Every state permits some form of garnishment, but the rules differ in three areas: how much of a paycheck a creditor can take, whether a creditor can levy a bank account, and whether deposited wages keep their exempt status after deposit.

Federal law under the Consumer Credit Protection Act sets a nationwide floor for wage garnishment, and many states impose stricter limits. Four states—Texas, Pennsylvania, North Carolina, and South Carolina—prohibit wage garnishment for consumer debts entirely, but that prohibition does not extend to bank accounts, and the disconnect catches people off guard.

Federal Wage Garnishment Limits Under the CCPA

The Consumer Credit Protection Act caps wage garnishment at the lesser of two amounts: 25% of disposable earnings, or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage. At $7.25 per hour, that threshold is $217.50 per week. Anyone earning $217.50 or less per week in disposable income cannot have wages garnished at all.

Disposable earnings means gross pay minus legally required deductions: federal and state taxes, Social Security, Medicare, and mandatory retirement contributions. Voluntary deductions like health insurance premiums, 401(k) contributions, and union dues are not subtracted.

These limits apply only to consumer debt judgments. Child support, alimony, federal student loans, and tax levies follow separate rules with higher garnishment percentages. Child support garnishment can reach 50% to 65% of disposable earnings depending on whether the debtor supports another family and whether payments are more than 12 weeks overdue.

The CCPA also prohibits employers from firing an employee over a single wage garnishment. That federal protection disappears if a second garnishment is served for a different debt, though some states extend termination protection to multiple garnishments.

States That Restrict Wage Garnishment Beyond Federal Law

Four states prohibit wage garnishment for consumer debts entirely:

– Texas. No wage garnishment for consumer judgments. Creditors are limited to bank account levies and property liens. – Pennsylvania. Wages cannot be garnished for consumer debts. Garnishment is permitted only for taxes, child support, student loans, and restitution. – North Carolina. Consumer wage garnishment is prohibited. Creditors must pursue other collection methods. – South Carolina. No consumer wage garnishment. Tax debts, child support, and student loans are excepted.

In all four states, the prohibition applies only to private creditor judgments. Government agencies collecting taxes, courts enforcing support obligations, and federal student loan servicers can still garnish wages.

Several other states set wage garnishment limits stricter than the federal 25% cap:

– Massachusetts. Limits garnishment to 15% of gross wages (not disposable earnings), which typically protects a larger portion of income than the federal formula. – New York. Caps garnishment at 10% of gross wages or 25% of disposable earnings, whichever is less. Earnings below 30 times the state minimum wage are fully exempt. – Colorado. Limits garnishment to the lesser of 25% of disposable earnings or the amount exceeding 40 times the state minimum wage, providing a higher floor than federal law. – California. Caps garnishment at the lesser of 25% of disposable earnings or the amount exceeding 40 times the state minimum wage. An additional low-income exemption protects earners below a specified threshold. – Illinois. Protects the greater of 85% of gross wages or 45 times the state minimum wage from garnishment.

Other states, including Alabama, Alaska, Arizona, Florida, and most remaining jurisdictions, follow the federal formula or set limits close to it. Florida offers a head-of-household exemption: a person who provides more than half the support for a child or dependent and earns $750 or less per week is fully exempt from wage garnishment.

How Bank Account Garnishment Differs from Wage Garnishment

Bank account garnishment, often called a bank levy, follows a different set of rules than wage garnishment, and the differences are not in the debtor’s favor. Federal law does not cap the percentage of a bank account that a creditor can seize. Unlike the CCPA’s 25% wage limit, a bank levy can freeze and take the entire non-exempt balance in one action.

Federal regulation 31 CFR Part 212 provides the only bank account protection that applies nationwide. It requires banks to automatically shield two months of directly deposited federal benefit payments (Social Security, SSI, VA benefits, and federal retirement) when a garnishment or levy order arrives. The bank reviews the account’s deposit history and shields the protected amount without requiring the account holder to file a claim.

Beyond that federal floor, bank account protections are entirely state-specific. Some states provide fixed-dollar exemptions that protect a set balance regardless of the source of funds. Others extend wage-garnishment protections to deposited wages by allowing the debtor to trace exempt income into the bank account. Many states offer no bank-specific protection at all beyond the federal benefit rule.

The practical consequence is that a debtor’s exposure changes the moment wages move from employer to bank account. A paycheck protected by a 25% garnishment cap at the employer level can become fully exposed once deposited, unless the state has a traced-wage statute or a bank account exemption.

State-by-State Garnishment Comparison

The table below compares each state’s garnishment rules across four dimensions: the wage garnishment limit, whether the state prohibits consumer wage garnishment, any fixed-dollar bank account exemption, and whether deposited wages retain their exempt status (traced-wage protection).

State	Wage Garnishment Limit	Prohibits Consumer Wage Garnishment?	Bank Account Exemption	Traced-Wage Protection?
Alabama	Federal formula	No	None	No
Alaska	Federal formula + higher exemption threshold	No	None	No
Arizona	25% of disposable earnings or amount exceeding 30x state minimum wage	No	$150 per bank account	No
Arkansas	Federal formula	No	$500 in any account	No
California	25% or amount exceeding 40x state minimum wage	No	~$2,244 (self-executing, adjusted annually)	Yes
Colorado	25% or amount exceeding 40x state minimum wage	No	None specific	Yes
Connecticut	25% of disposable earnings	No	None specific	Yes
Delaware	Federal formula	No	Prohibits bank garnishment for consumer debt	N/A
Florida	Federal formula; head-of-household exemption if ≤$750/week	No	None	Yes
Georgia	25% of disposable earnings	No	None	No
Hawaii	5% of first $100/month, 10% of next $100, 20% of remainder	No	None	No
Idaho	Federal formula	No	None	Yes
Illinois	Greater of 85% of gross wages or 45x state minimum wage exempt	No	None specific	No
Indiana	Federal formula	No	None	No
Iowa	Federal formula with state modifications	No	$1,000 in any account	Yes
Kansas	Federal formula	No	None	No
Kentucky	Federal formula	No	None	No
Louisiana	Federal formula	No	None	No
Maine	Federal formula with additional protections	No	None	No
Maryland	25% of disposable earnings or amount exceeding 30x state minimum wage; Md. min. wage applies	No	None	No
Massachusetts	15% of gross wages	No	$2,500	No
Michigan	Federal formula with low-income protections	No	None	No
Minnesota	Federal formula	No	None	Yes
Mississippi	Federal formula	No	None	No
Missouri	25% or amount exceeding 30x federal minimum wage; 10% for head-of-household	No	None	No
Montana	Federal formula	No	None	Yes
Nebraska	25% or amount exceeding 30x federal minimum wage with state modifications	No	None	Yes
Nevada	Federal formula	No	None	No
New Hampshire	Federal formula	No	None	No
New Jersey	10% of gross income if earnings exceed 250% of poverty level	No	None	No
New Mexico	Federal formula	No	None	No
New York	10% of gross wages or 25% of disposable earnings (lesser); earnings below 30x state minimum wage exempt	No	~$3,720–$4,080 (self-executing, 240x applicable state minimum wage)	No
North Carolina	Prohibited for consumer debts	Yes	None	N/A
North Dakota	Federal formula	No	None	No
Ohio	25% of disposable earnings; minimum wage earnings exempt	No	None	No
Oklahoma	Federal formula	No	None	Yes
Oregon	25% or amount exceeding 40x state minimum wage	No	$2,500 (self-executing under Family Financial Protection Act)	Yes
Pennsylvania	Prohibited for consumer debts	Yes	None	N/A
Rhode Island	Federal formula	No	None	No
South Carolina	Prohibited for consumer debts	Yes	None	N/A
South Dakota	20% of disposable earnings; $750/week exempt	No	None	No
Tennessee	25% or amount exceeding 30x federal minimum wage with exemptions for low-income earners	No	None	No
Texas	Prohibited for consumer debts	Yes	None	N/A
Utah	Federal formula	No	None	No
Vermont	Federal formula	No	None	No
Virginia	25% or amount exceeding 40x federal minimum wage	No	None	No
Washington	25% or amount exceeding 35x state minimum wage	No	None	No
West Virginia	Federal formula	No	None	No
Wisconsin	20% of disposable earnings	No	None	No
Wyoming	Federal formula	No	None	No
District of Columbia	25% or amount exceeding 40x federal minimum wage	No	None	No

Sources and thresholds change as states update minimum wages and exemption amounts. The figures above reflect current law as of early 2026. Several states prohibit or limit bank account garnishment through exemptions beyond what the table above captures, including traced-wage rules and automatic protections tied to state minimum wage formulas.

Why Prohibiting Wage Garnishment Does Not Protect Bank Accounts

Texas is the most common example of the wage-versus-bank disconnect. State law prohibits creditors from garnishing wages for consumer debts, which leads many people to assume that their bank accounts are equally protected. A judgment creditor in Texas can levy a bank account and seize deposited wages immediately—because the garnishment prohibition applies at the employer level, not the bank level.

The same disconnect exists in Pennsylvania, North Carolina, and South Carolina. In each state, the prohibition on wage garnishment ends at the employer. Once wages are deposited, they become commingled bank funds subject to levy unless a separate state exemption protects them. None of these four states provides a meaningful fixed-dollar bank account exemption.

The traced-wage doctrine could solve this problem if a state recognizes it. About 13 states explicitly allow debtors to trace exempt wages into a bank account and claim an exemption. But the burden falls on the debtor to document which funds in the account came from exempt wages, and commingling exempt and non-exempt money makes tracing harder. Most debtors fail to maintain adequate records, and most states do not require banks to perform the tracing automatically.

For people whose primary exposure is bank accounts rather than wages, the state’s wage garnishment law is largely irrelevant. The critical question is whether the state provides a bank account exemption, a traced-wage statute, or both. Without either, a judgment creditor can levy the full account balance regardless of how strong the state’s wage-garnishment protections are.

How Asset Protection Planning Reduces Garnishment Exposure

Garnishment law protects some income and some account balances by operation of statute, but the protections are limited to what each state provides. A person living in a state with no bank account exemption and no traced-wage protection has no statutory shield for liquid savings beyond the two-month federal benefit rule.

Asset protection planning addresses this exposure by moving assets into structures that are beyond a judgment creditor’s reach. The specific tools depend on the type of asset, the person’s state of residence, and the size of the exposure.

Exempt bank account strategies include holding funds in protected account forms like joint tenancy by the entirety or accounts containing only exempt funds like Social Security. These strategies require no transfers or entity formation but are limited to specific fund sources and specific states.

For liquid assets above what state exemptions cover, an offshore trust places funds with a foreign trustee outside the jurisdiction of U.S. courts entirely. A judgment creditor who obtains a garnishment order in a U.S. court cannot enforce it against assets held by a trustee in a jurisdiction like the Cook Islands, where U.S. judgments are not recognized. This is the strongest available protection for liquid assets and is worth considering for anyone whose net worth substantially exceeds their state’s garnishment exemptions.

Domestic strategies include LLCs that invoke charging-order protection, a remedy that limits a creditor to receiving distributions rather than seizing the underlying assets. For real property, homestead exemptions and tenancy-by-the-entirety titling provide state-specific protections that exist independently of garnishment law.

The most effective time to put these structures in place is before a creditor has a judgment. Post-judgment options are narrower, though Cook Islands trusts can be established after a lawsuit has been filed, with structural provisions to manage fraudulent transfer exposure.