Can a Lender Garnish My Wages If I Am Head of Household in Indiana?

Lenders or creditors, such as banks and credit card companies, are allowed to garnish the wages of debtors who live in Indiana. In some states, such as Florida and Missouri, all or most of a debtor's wages is exempt from creditor wage garnishments if she's the head of her household. Indiana does not provide this exemption.

Wage Garnishment Limit

Because Indiana does not provide a head of household exemption, the same general withholding limits apply to all debtors in the state. Some states set their own rules as to the maximum that can be deducted from wages for a garnishment, but Indiana follows federal law. As of 2014, your employer can withhold no more than the lesser of 25 percent of your disposable wages or the amount by which your disposable earnings are greater than 30 times the federal minimum hourly wage. This limit stands for all ordinary creditor debts in Indiana. For child and alimony support garnishments, depending on your situation, between 50 and 65 percent of your disposable wages can be garnished.

Garnishment Process in Indiana

To garnish your wages in Indiana, a lender that is not a government agency must first file a lawsuit against you. If the lender wins the case, it must then ask the court for an order to garnish your wages. If the judge grants the lender’s request, an order to withhold from payments from your wages will be forwarded to your employer. Thereafter, your employer must deduct the required amount from your wages and submit the payments to the lender.

Garnishment for Government Debts

If you owe the federal government or a state government money, the agency can garnish your wages without a court order. For example, the U.S. Department of Education can garnish 15 percent of your disposable wages for a single federal student loan without a court order. If you fail to pay your Indiana taxes or other debts owed to the Indiana government, such as overpayment of unemployment benefits, the state can garnish up to 25 percent of your disposable wages. Only up to a specific amount of your wages can be garnished for federal and state debts and no head of household exemption applies.

Employer Processing Fee

The state of Indiana permits your employer to deduct a minimal fee from debtors’ wages for processing a wage garnishment. As of 2014, for an ordinary creditor garnishment, your employer may charge $12 per garnishment order or 3 percent of the garnishment notice, whichever is more. You absorb half of the cost and the creditor pays the other half.

Garnishment Priority and Discharge Protection

A support withholding order takes precedence over a wage garnishment in Indiana, regardless of when the garnishment order was granted and implemented. Federal law prohibits your employer from discharging you because it received one garnishment against you. Under Indiana law, your employer cannot fire you because it received any number of garnishments against you or because a creditor or creditors attempted to collect a debt from you.


About the Author

Grace Ferguson has been writing professionally since 2009. With 10 years of experience in employee benefits and payroll administration, Ferguson has written extensively on topics relating to employment and finance. A research writer as well, she has been published in The Sage Encyclopedia and Mission Bell Media.