Wage Garnishment in Wisconsin

Wage garnishments can cause serious financial problems. When a creditor gets a court order to garnish your wages, they’ll take money directly from your paycheck. This reduces your take-home pay and can cause you to fall further behind with other debts. This article discusses who can garnish your wages in Wisconsin, how much of your paycheck can be withheld, and how you can stop a garnishment in the Badger State.

What Is Wage Garnishment?

A wage garnishment is an involuntary deduction from your paycheck. The money is used to pay past-due debts to your creditors. Most creditors must sue you and win a court judgment before they can garnish your paycheck. State law limits how much a creditor can garnish from your weekly wages, and some types of income are exempt from garnishment.

Who Can Garnish My Wages in Wisconsin?

Most garnishments in Wisconsin are done by consumer creditors. These are creditors for consumer debts such as credit cards, medical bills, personal loans, car loans, and more. Debt collectors and debt buyers also collect consumer debts. Consumer creditors have to win a lawsuit against you before they can garnish your wages.

There are other types of creditors that don’t have to win a lawsuit to garnish your wages. These include:

• The IRS and the Wisconsin Department of Revenue for back taxes,

• Creditors for domestic support payments, including child support and alimony, and

• Collectors for federal student loans.

The amount these creditors can garnish from your paycheck varies. This article will focus on wage garnishments for collecting consumer debts that happen by court order.

Wisconsin Wage Garnishment Process

First, the consumer creditor must sue you and serve you with a copy of the summons and complaint. A sheriff’s deputy or a private process server will usually serve these documents on you. You’ll need to reply. The timeline to reply to the summons will depend on which court you’re sued in. If it’s a Wisconsin circuit court, you have 20 days to file an answer. If you’re sued in small claims court, the summons you receive should show the date you need to appear in court to defend your case or the date by which you must file your answer with the court.

If you fail to file a timely answer or fail to appear at trial, the creditor will ask the court for a default judgment. This has the same effect as losing at trial — the court will award the creditor a judgment against you. 

Once the creditor has a judgment, they are called the judgment creditor, and you’re known as the judgment debtor. Most judgment creditors try to collect on their judgment with wage garnishment. They must get a court order for this, which is then served on your employer who’s called the garnishee. You’ll also get a copy. Your employer will withhold wages from your paycheck to pay the judgment creditor. 

Notice Requirements

Under Wisconsin law, when the creditor serves you with the garnishment notice, they’re also required to serve an exemption notice, a form for you to file an answer to the notice of garnishment, an exemption worksheet, and the poverty guidelines for Wisconsin. The notice of garnishment and other documents must be served on you within seven business days after the garnishee (your employer) has been served and at least three business days before the payday of the first affected pay period.

Objections and Exemptions

Just like you answered a lawsuit, you can answer the garnishment too. If you object to the garnishment amount or claim an exemption in your answer, the judgment creditor may file an objection and request a hearing. You may object to the garnishment if your income is below the poverty line and/or if you’ve received needs-based public assistance within the past six months. You’ll need to file a financial worksheet with the court to support this claim. If you forgot to put an exemption in your answer, you can file an amended answer. 

Renewing a Garnishment

Wage garnishments in Wisconsin expire after 13 weeks but can be renewed if you agree to the renewal. Why would anyone agree to be garnished? If you don’t agree, the judgment creditor has to start over with the garnishment proceedings. This is expensive, and the court allows the creditor to pass this cost on to you, so it’s usually best to agree with the extension. 

How Much of My Paycheck Can Be Taken by Wage Garnishment?

In Wisconsin, the total amount a creditor can garnish can’t be more than the amount of the judgment, which may include the original past-due debt plus any fees, costs, or interest. On a weekly basis, the judgment creditor can take the lesser of the following:

• 20% of your weekly disposable earnings, or 

• Your weekly disposable income minus 30 times the federal minimum wage. The current minimum wage is $7.25/hour, and 30 times that is $217.50. 

If you make $217.50 a week or less, your wages can’t be garnished. Also, any Wisconsinite whose household income is below federal poverty guidelines can’t have their wages garnished. This is a special state exemption. Finally, if you’ve been on means-tested public assistance at any time during the past six months, creditors can’t garnish your wages. These are programs such as SNAP (formerly known as food stamps) and Supplemental Security Income (SSI) where proof of income is required for eligibility. Wisconsin doesn’t allow payday lenders to garnish wages.

In standard cases where none of these exemptions apply, here are a few examples of how the garnishment amount is calculated:

Wisconsin Wage Garnishment Calculations

In Example 1, where the employee has disposable earnings of $600 per week, the 20% rule is used since $120 (20% of $600) is less than $382.50 ($600 minus $217.50). In Example 2, the employee has disposable earnings of $245 per week. Here, the 30 times minimum wage rule is used. That’s because $27.50 ($245 - $217.50) is less than $49 (20% of $245). 

If the earner in Example 2 was the only income-earner in a one-person household, their wages would likely be exempt from garnishment under Wisconsin’s state poverty exemption because their annual income would be $12,740. If they didn’t qualify for this exemption, they’d have $27.50 of their weekly earnings garnished.

This formula is just for consumer debt. There are different rules for withholding child support and alimony orders as well as certain other kinds of debt like government debt.

How To Stop a Garnishment in Wisconsin

You can stop the garnishment by paying off the debt in a lump sum. But if you had enough money to pay off the debt, you probably would’ve paid the bill and not been sued in the first place. You can also let the earnings garnishment continue until the debt is paid in full. 

If you’re struggling with multiple debts, you might want to consider filing bankruptcy to get debt relief. As soon as you file bankruptcy, an automatic stay goes into effect. This stops all debt collection activities, including garnishments. Usually, the judgment and debt that was being collected by the garnishment will also be eliminated in bankruptcy. Most people lose nothing but their debt due to the bankruptcy exemptions on many types of property.

If you have a simple Chapter 7 bankruptcy, Upsolve has a free tool that can help you file your bankruptcy without using an attorney. For more complicated Chapter 7 bankruptcies and Chapter 13 bankruptcies, Upsolve can help you find an experienced attorney in your area.

Are There Any Resources for People Facing Wage Garnishment in Wisconsin?

Legal aid organizations such as Legal Action of Wisconsin provide free legal assistance for lower-income Wisconsinites. These organizations help with civil (non-criminal) legal matters such as evictions, family law, garnishments, and bankruptcies. You can also visit:

• The Wisconsin State Law Library, which provides an extensive list of free legal resources for Wisconsinites.

• Wisconsin Free Legal Answers, which allows you to ask legal questions to attorneys for free.

• The Legal Aid Society of Wisconsin, which can help with filing bankruptcy to stop wage garnishment.

• The American Bar Association, which provides information on free legal help.