Garnishment in Iowa
Authored By: Iowa Legal Aid
What is garnishment?
Garnishment is when your money is taken from someone other than you to pay a court judgment. For example, your creditor might take your money directly from your bank or directly from your employer.
I have past due bills. Can my creditors garnish my wages or my bank account?
Your creditor cannot garnish your wages or bank account unless there has been a judgment entered against you. Your creditor must first sue you in court. If the creditor gets a court judgment saying that you owe them money, then your creditor may be able to garnish your wages or your bank account.
There is a judgment against me. Do I get any notices before the creditor takes money from my paycheck or bank account?
You should be given notice of any court judgment. However, you may not get notice of any wage or bank garnishment until the garnishment happens. The sheriff will give you a notice of garnishment and levy within seven days of the start of the garnishment. The sheriff will either personally serve you with the notice or will send it to you by both regular and certified mail. In the case of a bank garnishment, the bank must also send you notice of the garnishment within three days of when they review your account for a garnishment. In the case of a wage garnishment, you will also get notice of the garnishment no later than when you receive the check from which your wages were garnished.
What should the garnishment notice tell me?
The notice will tell you that a judgment has been entered against you and that your money is now being garnished. The notice will also tell you that some of your money may be exempt from garnishment. You will also be told that you have a right to a hearing to determine if your money is exempt from garnishment. The notice will warn you that you may lose your exempt money if you do not file something saying that it is exempt. The notice is to explain that federal and state law limit how much money can be taken from you. The notice should also include the entire Iowa code section explaining about how a hearing can be held to determine the amount of your income and to determine how much of your income can be garnished. You will also be told that you may consult with an attorney.
There is a judgment against me. How much money can my creditor take from my paycheck? For how long can the creditor keep taking money from my checks?
The amount of income that is exempt depends on a couple of factors. The first factor is the type of debt you have. If you have a consumer debt, then the weekly amount that is exempt is 40 times the Federal minimum wage. If you have a non-consumer debt, then the exempt amount is 30 multiplied by the Federal minimum wage.
How do I know if it is a consumer or a non-consumer debt?
- A consumer debt must pass three tests.
- It was for personal or family use, not business.
- You had to pay interest or a finance charge and paid in installments.
The amount involved is less than the designated “threshold amount.” As of July 1, 2014, the “threshold amount” is $53,500. The threshold amount is adjusted annually for inflation.
Credit card debts, car loans and installment payments for furniture are common examples of consumer debts. Non-consumer debts are those that don't meet the three tests. This article does not apply to child support and alimony, which are not covered by any of these rules.
The chart below shows how much is "off limits" from collection. The amount depends on how often you get paid. If the Federal minimum wage changes, these figures will also change.
Pay Period Exempt Amount if Non-Consumer Exempt Amount if Consumer Debt
Debt (30 x $7.25) (40 x $7.25)
Weekly $217.50 $290.00
Bi-weekly $435.00 $580.00
How much money you have after taxes and required withholdings is your "disposable income." If that amount is more than the exempt figure in the chart, a creditor can garnish your wages. The amount they can garnish is:
- the amount by which the disposable income is more than the exemption OR
- 25% of the disposable income, whichever is less.
Here are a couple of examples:
Let's say your weekly income after taxes is $300. The garnishment is for a consumer debt. $290 would be exempt, which leaves $10. 25% of $300 is $75. The most that could be garnished would be $10. If it was for a non-consumer debt, $217.50 could be protected, leaving $82.50. We know that 25% of $300 is $75. The creditor can take the lesser of the two amounts. In this case for a non-consumer debt, the creditor can only take $75.
Suppose your disposable income was $250 per week. For a consumer debt, $290 is protected. All of the wages would be exempt. For a non-consumer debt, $217.50 is protected. This leaves $32.50. $32.50 is less than $62.50 (25% of $250) so the creditor can only take $32.50.
There is also a cap on how much a creditor can take during a calendar year. The amount of the cap depends on your income. The chart below shows these limits.
Annual Wage Garnishment Limit
$0 to $11,999
$12,000 to $15,999
$16,000 to 23,999
$24,000 to $34,999
$35,000 to $49,999
More than $50,000
10% of expected earnings
There is a judgment against me. How much money can my creditor take from my bank account? For how long can the creditor keep taking money from my bank account?
$1000 of cash or money in bank accounts can be claimed as exempt. If the only money going into the account comes from wages and the wages have already been garnished, the remainder is all exempt. However, the bank may not know where your money comes from or that it has already been garnished.
Income from certain sources is exempt. This includes money from public benefits, social security, veteran's benefits, child support and alimony.
When a bank or credit union gets an order to garnish someone's account, it has two business days to review the debtor's account. The bank or credit union will need to find the amount of protected federal benefits like Social Security benefits that were direct deposited into the account during the two previous months.
If federal benefits were deposited during the previous two months, the bank or credit union must protect either:
- The total amount of protected benefits deposited over the past two months; or
- The current balance, whichever is less.
However, the bank is not required to find out about other exempt funds, such as child support or alimony.
How can I stop my creditor from taking money from me that they are not supposed to take?
If you work out a payment plan with the court you can avoid the creditor using garnishment to collect on the debt. Be aware that if you do this and then do not make the payments, the creditor may still use garnishment to collect.
If your income is under these protected limits you can stop garnishment before it happens by filing an “Affidavit of Property Exempt from Execution.” This is the legal name for a document listing your protected income and protected assets. It is very important that the Affidavit is filled out truthfully. The Affidavit is then filed with the Sheriff's office and the Clerk of Court in the county where you were sued. You also need to send a copy of the affidavit to the entity that is trying to collect money from you (or to its attorney). This should stop the garnishment before it starts.
If the entity that is trying to garnish your wages or bank account does not believe you are being truthful in your Affidavit, it is possible that they may ask the court to schedule a hearing to question you about your income and assets under oath. This is called a debtor exam. DO NOT IGNORE notices from the court ordering you to appear for a hearing. To ignore a court order can lead to a finding of contempt of court and result in being picked up by the police and taken to jail.
My creditor is already taking more money from my paycheck or bank account than they are supposed to be taking. What can I do to stop them?
If you find out that your wages or bank account is being garnished, even though they are under protected limits, you will need to file a “Motion to Quash.” This needs to be filed within 10 days from when you are served notice of the garnishment. Sometimes you can file the Motion later but don't wait. A hearing will then be set to give you a chance to prove that your income or assets are under protected limits. You will need to bring copies of your wage records, bank statements, Social Security payments and other documents to the court. There is no court fee for filing this motion to stop the garnishment.
Even if you have income or assets that are not under the protected limits you may apply for a hearing with the court to reduce the amount of allowed garnishment. You would need to claim that the garnishment makes a hardship for you and your family. You must show the judge evidence about your household dependents, necessary expenses, and other possible reasons that make it difficult for you to maintain your household unless the garnishment is stopped or reduced.
To get this hearing you need to file a written application with the Clerk of Court. You would ask for relief from garnishment under Iowa Code section 630.3A. There is no court fee for filing this request for a hearing.
We want to pay our bills and most of us want to avoid conflicts over money. However the loss of a spouse, or a job may make it impossible to pay a bill or a debt. Perhaps it is medical expenses from illness, surgery, or an accident that leads to large debt that can't be paid. Maybe it is debt or bills due to other family emergencies.
DO NOT IGNORE COURT NOTICES: If you are sued or are being garnished from a previous lawsuit you need to contact Iowa Legal Aid or a private attorney to review your options right away. You may have a defense to the lawsuit or you may be able to prevent garnishment of your income and assets. KNOW YOUR LEGAL RIGHTS AND OPTIONS.