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What is a garnishment?

A wage or bank account garnishment occurs when a creditor takes a portion of your paycheck or money from your bank account to collect a debt.

The CFPB’s Debt Collection Rule clarifying certain provisions of the Fair Debt Collection Practices Act (FDCPA) became effective on November 30, 2021.

Most garnishments are by court orders after a judgment. Certain debts owed to the federal government, such as to the IRS, may result in a garnishment without a court order.

State and federal laws have limits or “exemptions” that apply to bank account and wage garnishments, usually to make sure you have something left to live on. Some states do not allow wage garnishments for certain kinds of debt. It is also a violation of federal law, the Fair Debt Collection Practices Act (FDCPA), for a debt collector to threaten that your wages will be garnished if your wages cannot legally be garnished.

If your bank account or wages are garnished, you may want to consult with a lawyer.

The creditor or the debt collector also may make a negative report to a consumer reporting company, affecting your credit report and credit scores. In some cases, the debt may be too old to affect your credit report or credit scores. If you don’t believe you owe the debt, you can dispute it with the debt collector and the credit reporting company. If you dispute the debt in writing within 30 days of receiving information about the debt from the collector, then the debt collector must send you verification of the debt. You can also ask the debt collector for additional information.

If you're having trouble with debt collection, you can submit a complaint with the CFPB online or by calling (855) 411-CFPB (2372).