Dena Standley | August 24, 2023
Edited by Hannah Locklear
Summary: New York laws protect you from unfair wage garnishment. For example, Only 10% of your gross income or 25% of your disposable income can be garnished during each payment period in New York. Luckily, there are ways to stop wage garnishment or avoid it before it happens. Debt settlement is a great way to prevent wage garnishment, and SoloSettle makes settling your debt easier.
If you have lost a debt collection lawsuit and have a job, the creditor can take money straight off your paycheck. What can you do to stop them? Find out in this simplified discussion of New York's wage garnishment process and laws.
In late 2022, the New York governor signed into law a bill preventing non-profit hospitals from garnishing wages or placing liens on a debtor's primary home. That decision relieved thousands of New Yorkers who were sinking deep into debt for seeking medical care.
Despite the reprieve of the new law (S.6522A/A.7363A), other creditors can still seize the debtor's wages to satisfy a money judgment. Most of them would have to obtain an income execution order from the court before garnishing wages in New York.
In this article, we’ll break down some of New York’s wage garnishment laws and how you can stop or avoid wage garnishment as a NY resident.
N.Y.C.L.P.R. § 5231 limits wage garnishment amounts.
This law states that only 10% of your gross income or 25% of your disposable income can be garnished during each payment period. But the amount should be at most 30% of the minimum hourly wage. Even if several creditors garnish your wages concurrently, they must leave you with at least 30%. The most recent garnisher typically waits until you have paid off the first one.
Non-private debts (family and public debts) have a higher limit. For instance, 50% of your earnings can go to spousal or child support if you support another spouse or child. If you are not currently providing for another spouse or child other than the one garnishing your wages, you can have 60% garnished to pay them.
One consumer's minimum wage differs from the next in New York. Most cities have a minimum wage of $13.20, but Long Island, New York City, and Westchester have a $15 minimum hourly wage requirement.
With that in mind, you will handle wage garnishment better if you know how it works.
In New York, your wages may be garnished to pay off debts connected to back taxes, arrears in child support, defaulted student loans, and mandatory employment benefits.
On the other hand, most unsecured credit providers require a monetary judgment and a court order to withhold income. For such creditors, the process generally follows these steps:
This is the typical route a creditor must take in order to garnish someone’s wages to pay off a consumer debt. In other words, creditors must sue you and win the case before they have the legal right to garnish your paycheck. As such, it’s important to know how to defend yourself in a debt lawsuit as a New York resident.
When a creditor sues you for debt, you should receive legal documents in the mail notifying you of the case. These court documents are called the Summons and Complaint. The documents contain dates by which you must file an Answer. Do everything possible to file your response in time. It takes three steps:
To learn more about how to respond to a debt lawsuit in New York, check out this video:
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Debt settlement can help you prevent wage garnishment.
In a debt settlement, you offer your creditor a portion of the total amount due, usually at least 60% of the debt’s value. In exchange for a lump-sum payment, the creditor agrees to drop its legal claims against you and release you from the remaining balance.
A creditor often considers negotiating a debt settlement if you promise to make a lump-sum payment and clear the remaining amount within a short period. Because of this, debt settlement usually works best if you have some cash saved or expect to receive some money soon
Settling your debt helps you avoid a judgment and wage garnishment. You’ll save some money and move on from this challenging experience.
If you decide to settle your obligation, you’ll want to ensure you get the terms of your agreement in writing and pay the creditor before your court date. If you’ve never tried debt settlement before, consider working with a professional organization that will guide you through the process.
To learn more about how to settle a debt in New York, check out this video:
SoloSettle, powered by SoloSuit, is a tech-based approach to debt settlement. Our software helps you send and receive settlement offers until you reach an agreement with the collector. Once an agreement is reached, we’ll help you manage the settlement documentation and transfer your payment to the creditor or debt collector, helping you keep your financial information private and secure.
Stopping wage garnishment in New York is straightforward in some situations.
If you did not receive court papers and the court entered a default judgment, you can request the court to vacate the judgment. If the judge accepts your request, garnishment stops, and the creditor may return the money they have already taken from you. In the meantime, be prepared to defend yourself in court.
Alternatively, you may file an Order to Show Cause so that the court can lower the amounts if you cannot afford to lose so much of your income.
Bankruptcy places an automatic stay that immediately stops debt collection lawsuits and wage garnishment. If you need advice on filing, contact our partners for free by calling 888-790-4291.
Some of your earnings are exempt from garnishment. You must remain with at least 30% of the minimum wage in New York. The law requires that you take home at least 30 times the minimum hourly salary each week.
As mentioned, hospitals cannot garnish your wages to pay medical bills. Some exemptions require that you apply for them. Below is a list of exempt income:
No creditor can take such income to pay the debt.
The best defense against debt collectors' wage garnishment is filing your Answer to a court Summons within the deadline. If a creditor already garnishes your paycheck, you can bring up any exempt wages they have withheld illegally with the court. You may also request to vacate the judgment that ordered the execution or file for bankruptcy. However, settling your debt is the best way to avoid wage garnishment and give yourself a financial reset.
SoloSuit makes it easy to fight debt collectors.
You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.
SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.
Here's a list of guides for other states.
Being sued by a different debt collector? Were making guides on how to beat each one.
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Is your credit card company suing you? Learn how you can beat each one.
Need more info on statutes of limitations? Read our 50-state guide.
Need help managing your finances? Check out these resources.
Out Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it.
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