Key takeaways

  • Most of the time unemployment benefits are protected from wage garnishment.
  • In some cases, unemployment benefits can be garnished if you owe income taxes, student loan debt or child support.
  • Filing for bankruptcy may help you protect your unemployment benefits from garnishment even for these reasons.
  • Making a plan to repay your debts can help you create a better financial future for yourself.

Wage garnishment happens when your employer follows a court order to withhold a certain percentage of your paycheck to repay a defaulted on debt. For instance, the IRS can garnish your wages if you fail to pay your tax debts.

Filing for bankruptcy can stop wage garnishment in many cases. However, there are some exceptions to this rule.

Are unemployment protected from wage garnishment?

To get debts discharged through Chapter 13, you must wait four years after filing a Chapter 7 bankruptcy.

If you don’t respond to a creditor’s attempt to collect a debt, it first sends your debt to a debt collector. The debt collector has a limited time to collect — usually before the debt falls off your credit report. If you ignore the debt collector and make no attempt to pay, it might start the wage garnishment process to collect what you owe.

Unemployment and other benefits, such as Social Security benefits, Federal Student Aid and disaster assistance, are usually protected from wage garnishment. However, these benefits can be garnished if you owe money for child support, taxes or student loans. Because garnishment laws can be set at the state level, where you live affects what can be garnished.

When can unemployment benefits be garnished?

In most circumstances your unemployment benefits are exempt from garnishment, but this is not always the case. A handful of instances may impact your unemployment benefits. And in these cases, the creditor typically does not have to get a court order to garnish the benefits.

Child or spousal support

A parent’s obligation to pay child support does not cease because of the loss of a job. Both past-due child support and ongoing payments can be deducted from unemployment benefits. However, the exact approach to doing this may vary by state.


Depending on where you live, your unemployment benefits may also be at risk if you owe state taxes. Some states may garnish a portion of your benefits to recoup what you owe.

Each state has its own laws addressing this issue. In California, for example, money may be deducted from weekly unemployment benefits for unpaid taxes.

Student loan debt

In the case of student loans that are in default, up to 15 percent of disposable income may be garnished until the debt is repaid or the loans are no longer in default status. The government does not need a court order to garnish income if the debt is associated with federal student loans. However, the creditor must sue you in court for private student loans.

Can you protect your wages from being garnished?

It’s not always possible to keep your unemployment benefits from being garnished, but there are some cases where you may be able to fend off wage garnishment.

Student loan options

If you owe payments on your student loan debt, you may be able to avoid wage garnishment if you roll your student debt into a consolidation loan.

You can also attempt to rehabilitate your student loans. Rehabilitation is a voluntary agreement you enter with the loan servicer. As part of the agreement, you must make a series of nine consecutive payments to bring the loan back into good standing. Each of the payments typically amount to 15 percent of your discretionary income.


Filing for bankruptcy is another way to stop many forms of wage garnishment. This approach won’t protect your unemployment benefits in all cases. For instance, filing Chapter 7 bankruptcy will not stop garnishment for child support or alimony payments.

When you pursue Chapter 13 bankruptcy, even garnishments for alimony and child support will be stopped. But you will still have to keep up with those alimony and child support debts via a payment plan over three to five years. Garnishment action ceases as long as you continue making the payments outlined in the plan.

Bottom line

Unless you have debt for child support, taxes or federal student loans, a creditor isn’t allowed to garnish your unemployment benefits. If a creditor does try to garnish unemployment benefits that aren’t legally theirs to take, you may want to speak with legal counsel.

Creating a plan to repay debt while unemployed can help you improve your financial future and avoid future wage garnishment.