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What to Do About Wage Garnishment When You Don’t Have Any Wages



I received a wage garnishment letter from a debt collector, and I’m curious: What happens if I don’t make any money and I don’t have direct deposit? I have a shop on Etsy that I opened this year, but I haven’t made any sales. Can they still garnish my bank account if there’s no money in it? Can they put a freeze on it? Or do they garnish cash deposits as well?

– Jasmine in New Jersey

Howard Dvorkin, CPA responds…

Yes, Jasmine, your debt collector can go to court and get a “writ of garnishment” even if your bank account is empty. Of course, they don’t know your bank account is empty until after they show that writ to your bank.

After that, it’s done.

Writ of garnishment vs wage garnishment

I asked my friend Eric Olsen about this. He’s an attorney who founded HELPS, which stands for Help Eliminate Legal Problems for Seniors and Disabled. He described your situation like this: “It’s a one-shot deal. If they serve that writ at 10 o’clock and there’s nothing in your account, it’s over. If you deposit $1,000 at 11 o’clock, they can’t get it.”

Of course, wage garnishment involves the courts and cash, so it’s never quite that simple. If the debt collector also garnishes your wages instead of just trying to seize your bank account, that can stay in effect for 60 days – more in some states and less in others.

Protection from wage garnishment

According to Olsen, at least $217.50 a week is protected from wage garnishment. It’s a complicated formula that says 75 percent of your disposable earnings is protected, or 30 times the federal minimum wage, whichever is the bigger amount. But the important thing to know is: Unless your Etsy store really takes off, even that money is protected.

Wage garnishment protections for Social Security

You didn’t say if you’re receiving Social Security, Jasmine. If you are, and if your monthly benefit is direct-deposited into your account, you’re protected there, too. Federal law not only says your Social Security can’t be touched, but it also adds to that. As Olsen explains, it’s another formula: The bank must review your transactions for the previous two months and tally the Social Security benefits you received – then protect double that amount.

So, imagine you received $1,657 a month (which is the average benefit as of January 2022). The bank must let you access $3,314 – even if that debt collector has court permission to seize your bank account.

“I’ve yet to talk to a bank manager who knows that law,” Olsen says. Here’s how you can learn more about what bank managers don’t know: Can Social Security Be Garnished for Credit Card Debt?

Protections depend on who and what you owe

So far, we’ve just been talking about a debt collector. Much of what I’ve said so far would be very different if you owed back taxes. The IRS can garnish even your Social Security. Ditto for federal student loans you’ve defaulted on and any court-ordered child support or alimony you owe.

If you don’t know these laws and even your bank doesn’t know some of these laws, where do you turn? That’s where can help. We’ll connect you with certified counselors that can provide a free debt analysis, then they match you with the perfect solution to your financial problems. That’s how I met Eric Olsen. It’s how you can, too.

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