Types of Income

• When a bank or employer receives garnishment orders from the courts, money is automatically deducted from your paycheck or bank account. However, federal law provides protection of certain types of income in most cases. The types of income protected from garnishment include Social Security and Supplemental Security Income payments, veteran and unemployment benefits, private and public pensions and disability, railroad retirement and workers' compensation benefits. Federal law prohibits creditors from garnishing any of these income sources. You may dispute any garnishment of wages protected by law.
  
  

Exceptions

• Exceptions exist regarding the types of income protected from garnishment. If you owe money for back child support, federal income taxes or student loans, creditors can garnish all of your income sources. Federal law allows the IRS to garnish up to 15 percent of your monthly Social Security benefits until you pay the debt in full. Child support courts can mandate a garnishment up to 60 percent of your normally exempted income. You cannot lose your job or go to prison over garnishment of wages. However, you may suffer penalties if you fail to show up for scheduled court dates.
  
  

Garnishment Process

• When a creditor wins a judgment against you for unpaid debts, they can take the court-ordered judgment to the local sheriff's department, who then sends the information to your bank and employer. The IRS, U.S. Department of Education and child support agencies do not need court-ordered judgments to garnish your wages. They simply bypass the process. The federal and private agencies paying you benefits receive information concerning garnishment and deduct the predetermined amount from your federal monthly benefits.
  
  

Ways to Protect Yourself

• If you receive federal benefits and a private creditor sends you garnishment information, contact an attorney specializing in wage garnishments. Most banks automatically protect your exempted income that is direct deposited into your bank account. However, you can request to receive a check in the mail instead of a direct deposit of your federal benefits. This way you can avoid losing your money if your bank fails to protect your exempted income from garnishment.