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What Is Wage Assignment?

Definition and example of wage assignment, how wage assignment works, wage assignment vs. wage garnishment.

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A wage assignment is when creditors can take money directly from an employee’s paycheck to repay a debt.

Key Takeaways

• A wage assignment happens when money is taken from your paycheck by a creditor to repay a debt.
• Unlike a wage garnishment, a wage assignment can take place without a court order, and you have the right to cancel it at any time.
• Creditors can only take a portion of your earnings. The laws in your state will dictate how much of your take-home pay your lender can take.

A wage assignment is a voluntary agreement to let a lender take a portion of your paycheck each month to repay a debt. This process allows lenders to take a portion of your wages without taking you to court first.

Borrowers may agree to allow a lender to use wage assignments, for example, when they take out payday loans . The wage assignment can begin without a court order, although the laws about how much they can take from your paycheck vary by state.

For example, in West Virginia, wage assignments are only valid for one year and must be renewed annually. Creditors can only deduct up to 25% of an employee’s take-home pay, and the remaining 75% is exempt, including for an employee’s final paycheck.

If you agree to a wage assignment, that means you voluntarily agree to have money taken out of your paycheck each month to repay a debt.

State laws govern how soon a wage assignment can take place and how much of your paycheck a lender can take. For example, in Illinois, you must be at least 40 days behind on your loan payments before your lender can start a wage assignment. Under Illinois law, your creditor can only take up to 15% of your paycheck. The wage assignment is valid for up to three years after you signed the agreement.

Your creditor typically will send a Notice of Intent to Assign Wages by certified mail to you and your employer. From there, the creditor will send a demand letter to your employer with the total amount that’s in default.

You have the right to stop a wage assignment at any time, and you aren’t required to provide a reason why. If you don’t want the deduction, you can send your employer and creditor a written notice that you want to stop the wage assignment. You will still owe the money, but your lender must use other methods to collect the funds.

Research the laws in your state to see what percentage of your income your lender can take and for how long the agreement is valid.

Wage assignment and wage garnishment are often used interchangeably, but they aren’t the same thing. The main difference between the two is that wage assignments are voluntary while wage garnishments are involuntary. Here are some key differences:

Once you agree to a wage assignment, your lender can automatically take money from your paycheck. No court order is required first, but since the wage assignment is voluntary, you have the right to cancel it at any point.

Wage garnishments are the results of court orders, no matter whether you agree to them or not. If you want to reverse a wage garnishment, you typically have to go through a legal process to reverse the court judgment.

You can also stop many wage garnishments by filing for bankruptcy. And creditors aren’t usually allowed to garnish income from Social Security, disability, child support , or alimony. Ultimately, the laws in your state will dictate how much of your income you’re able to keep under a wage garnishment.

Creditors can’t garnish all of the money in your paycheck. Federal law limits the amount that can be garnished to 25% of the debtor’s disposable income. State laws may further limit how much of your income lenders can seize.

Illinois Legal Aid Online. “ Understanding Wage Assignment .” Accessed Feb. 8, 2022.

West Virginia Division of Labor. “ Wage Assignments / Authorized Payroll Deductions .” Accessed Feb. 8, 2022.

U.S. Department of Labor. “ Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title III (CCPA) .” Accessed Feb. 8, 2022.

Sacramento County Public Law Library. “ Exemptions from Enforcement of Judgments in California .” Accessed Feb. 8, 2022.

District Court of Maryland. “ Wage Garnishment .” Accessed Feb. 8, 2022.

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Wage garnishment, or wage deduction, is the process of collecting a judgment by requiring the debtor's employer to take money out of the debtor's paycheck. However, the employer can only take a part of the debtor's paycheck for you. Sometimes, you might not be able to collect any of the debtor's paycheck if the debtor doesn't make enough money. 

The most the employer can hold out for you is 15% of the debtor's gross income before taxes or deductions. However, the withholding can't leave the debtor with less than 45 times the state minimum wage as weekly take-home pay. The state minimum wage is $14 per hour so that there cannot be any wage deduction if the debtor's take-home pay is less than $630. 

Here's how to find out how much an employer can take from a debtor's paycheck:

• Multiply the debtor's gross weekly wages by .15, and write this number down, and
• Subtract 630 from the debtor's net (take home) weekly wages, and write this number down.

The lower of the two numbers is how much the creditor can garnish from the debtor per week.  If the lower number is zero, the creditor cannot garnish any of the debtor's wages.

Welfare and public or government benefits are protected from creditors. This includes:

• Social Security Disability,
• Retirement and Dependent/survivor benefits,
• General Assistance,
• SNAP (Food Stamps),
• Unemployment insurance benefits, and
• Most veterans' benefits.

This means that you will not be able to take all or any part of those benefits to collect what the debtor owes you.

Child support and maintenance that the debtor receives are usually not garnishable either.

To get a wage garnishment, you need to file a Citation to Discover Assets to Debtor's Employer first. Use the  collect a judgment from debtor's employer program to make the forms you need.

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What Is a Wage Assignment?

How wage assignment works.

• Why Are Wage Assignments Voluntary?

Wage Garnishment

The bottom line.

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• Debt Management

Wage Assignment: What It Means, How It Works

Wage assignment is the act of taking money directly from an employee's paycheck in order to pay back a debt obligation. Such an automatic withholding plan may be used to pay back a variety of debt obligations, including back taxes, defaulted student loan debt, and both child and spousal support payments.

Key Takeaways

• A wage assignment takes funds directly from an employee's paycheck to pay back a debt.
• How wage assignments are regulated varies by state, with some states even allowing for voluntary child support agreements.
• A wage garnishment is an involuntary deduction and requires a court order.

Wage assignments are typically incurred for debts that have gone unpaid for a prolonged period of time. Employees may sometimes opt for a voluntary wage assignment to pay for things like union dues or to contribute to a retirement fund.

A wage assignment is processed as part of an employer's payroll procedure. The employee's paycheck is decreased by the amount of the assignment and noted on their pay stub.

A wage assignment is often a lender's last resort to receive repayment from a borrower who has previously failed to pay a debt obligation.

Wage assignments are a valuable tool for collecting unpaid debts, but unfortunately, they may be associated with abusive lending practices . If you're struggling with your debt, one of the best debt relief companies or credit counseling agencies may be able to help you get back on track before a wage assignment is incurred.

What Makes Wage Assignments Voluntary?

In a voluntary wage assignment, a worker essentially asks their employer to withhold a portion of their paycheck and send it to a creditor to pay off a debt. Loan agreements may sometimes include a voluntary wage assignment clause in their terms should the borrower default on their loan.

Payday lenders often include voluntary wage assignments into their loan agreements to better their chances of being repaid. Laws regarding wage assignments vary by state.

For example, in West Virginia, wage assignments are capped at 25% of a worker's take-home earnings, the employee and the employer must sign the agreement, and agreements must be renewed annually. Under Illinois law, a lender cannot resort to wage assignment until a debt is 40 days in default. The wage assignment cannot continue for more than three years, and the worker can stop the wage assignment at any time.

Involuntary wage deductions, known as wage garnishments , require a court order and are most likely to be employed to collect spousal and child support payments that have been ordered by a court. Wage garnishments may also be used to collect unpaid court fines or student loans that have been defaulted on.

Several states allow individuals to sign up for voluntary child support agreements. In such a case, both parents must agree to a plan. Once that happens, a voluntary wage assignment may begin. If a child support or welfare agency is involved, they would have to approve any plan.

How Long Can I Have a Wage Assignment?

Since wage assignments are voluntary, the length of time that you use one can vary. Some loans include a wage assignment agreement, so you'll have to check the language of your loan to determine your obligation. Each state also has its own regulations regarding wage assignments.

How Much of My Income Can Go to Wage Assignments?

Every state has its own regulations, but typically 15–25% of your disposable income can be designated for wage assignments.

Is Wage Garnishment the Same as Wage Assignment?

While they are similar, wage garnishment and assignment are not the same. Wage garnishment is an involuntary paycheck deduction, typically ordered to repay child support, student loans, tax debt, or bankruptcy. A wage assignment is voluntary and may be used to repay a consumer debt.

Wage assignments may be a useful tool to help you pay down a debt. Wage assignments are voluntary but they may be hidden in the fine print of some loan products, so read everything carefully before signing. Check the regulations in your state to determine if your wage assignment is revocable.

West Virginia Division of Labor. " Wage Payment and Collection (WPC) Act: Payroll Deductions and Wage Assignments ," Page 3.

Illinois General Assembly. " (740 ILCS 170/) Illinois Wage Assignment Act ."

U.S. Department of Labor. " Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title III (CCPA) ."

Illinois Legal Aid. " Understanding Wage Assignment ."

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Garnishment

Wage garnishment is a legal procedure in which a person's earnings are required by court order to be withheld by an employer for the payment of a debt such as child support. Title III of the Consumer Credit Protection Act (CCPA) prohibits an employer from discharging an employee whose earnings have been subject to garnishment for any one debt, regardless of the number of levies made or proceedings brought to collect it.

Title III protects employees from being discharged by their employers because their wages have been garnished for any one debt and limits the amount of employees' earnings that may be garnished in any one week. It does not, however, protect an employee from discharge if the employee's earnings have been subject to garnishment for a second or subsequent debts.

Title III applies to all individuals who receive personal earnings and to their employers. Personal earnings include wages, salaries, commissions, bonuses, and income from a pension or retirement program, but does not ordinarily include tips.

Webpages on this Topic

Wage Garnishment - Information on wage garnishment from the Wage and Hour Division.

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Wage Garnishment in Illinois

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A wage garnishment order allows creditors to take money directly from your paycheck. Most of the time, this is only possible after a court has entered a judgment. Here's how Illinois regulates wage garnishments.

Written by Upsolve Team .  Updated November 7, 2022

If someone sues you and gets a judgment against you, their next step could be to garnish your wages. Wage garnishment — having some of your paycheck withheld to pay a debt — can make an already difficult financial situation even harder. In Illinois, creditors and employers must comply with strict rules and limitations about how wages can be garnished and the amount of money that can be withheld. This article covers how wage deduction works in the Prairie State and what you can do if you’re facing wage garnishment.

What Is Wage Garnishment?

If you owe money to a person or business (otherwise known as a creditor), wage garnishment is one method the creditor can use to collect that money. When your wages are garnished, your employer keeps a certain amount of your check each pay period and sends it to the creditor to pay toward your debt. The garnishment continues until the debt is paid. In most cases, the creditor must get a court order to garnish your wages. There are limits on how much money can be withheld from each paycheck, though these limits vary from state to state.

Who Can Garnish My Wages in Illinois?

In Illinois, any creditor can usually garnish your wages if the creditor has a Wage Deduction Order against you. This includes the original creditor or any of that creditor’s representatives, as well as debt collection agencies or debt buyers.

To get a signed Wage Deduction Order, most creditors must first file a lawsuit against you for the money you owe. If the creditor proves to the judge that you owe the debt, the court will enter a judgment against you in the amount of the debt. If you ignore the lawsuit or don’t go to court, the court can still enter a default judgment against you for the money owed. Once the creditor has a money judgment against you, the creditor can use wage garnishment or other measures to try to collect the judgment debt.

The garnishment rules are different for certain types of debts. Some examples include income taxes owed to the IRS, defaulted student loans, and debts owed to the state of Illinois. A creditor doesn’t need to sue you or get a judgment against you to garnish wages for these debts, and different rules control how much can be garnished from each check.

Child support and alimony are also subject to different rules. In Illinois, all child support orders include an automatic wage deduction order. Even if child support is not automatically deducted from your paycheck, the other parent can get a Wage Deduction Order against you if you miss payments. Illinois uses the federal law guidelines for child support garnishments. Under Illinois law, child support can be withheld from any type of income, even income that is off-limits to other creditors, such as workers’ compensation and unemployment benefits.

Wage assignments are another exception. A wage assignment is usually something you agree to as part of a contract. For example, if you get a payday loan, the loan agreement could contain a section that says you agree to a wage assignment if you miss two back-to-back payments. Illinois law treats wage assignments as voluntary agreements, not as wage garnishments, so the standard garnishment rules don’t apply.

Although Illinois wage garnishment law has special procedures and rules in place for these types of debts, this article focuses on typical consumer debts, such as medical bills or credit card debts, which require a judgment and wage deduction order.

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Illinois Wage Garnishment Process 

In Illinois, a creditor with a judgment against you (sometimes called a judgment creditor) usually initiates the wage garnishment process by sending a Citation to Discover Assets to your employer and mailing a copy to you. In some counties, instead of a Citation to Discover Assets, the creditor sends a Wage Deduction Summons to your employer and a Wage Deduction Notice to you. The documents and process are substantially the same regardless of the form title.

Your employer must provide the information requested in the citation before the hearing date shown on the citation’s front page. Illinois citation forms and the information requested vary from county to county, but, at a minimum, your employer must tell the creditor whether you are employed, how much you earn, and how often you get paid.

If your employer provides the requested information before the hearing date, they don’t have to attend the hearing. On the hearing date, the judge will issue a Wage Deduction Order. You and your employer will both receive a copy of the order. After your employer receives the order, your employer will begin garnishing your wages. 

You don’t have to attend the hearing, but you may attend. The hearing is your only opportunity to object to the garnishment. You can object to the garnishment if your wages are protected by exemptions that your employer didn’t include with its answer to the creditor. Employment income is usually not exempt under Illinois law, but other kinds of income are exempt from wage deductions. Some examples of exempt income include Social Security and other income from the federal government, workers’ compensation benefits, unemployment benefits, and government assistance, to name a few.

You can also object to the garnishment if the amount of the judgment is incorrect. For example, if you’ve already paid part of the judgment and your payment hasn’t been properly deducted from the total. You can’t object to the validity of the judgment at this hearing, only the remaining balance.

How Much of My Paycheck Can Be Taken by Wage Garnishment?

Illinois law limits the amount that can be taken from your paycheck to fulfill a wage deduction order. From each paycheck, your employer can withhold whichever of these two is smaller:

15% of your gross wages (before subtracting taxes and other deductions); or

Your disposable earnings (the take-home amount after taxes and deductions are subtracted) minus Illinois’ hourly minimum wage multiplied by 45. Illinois’ minimum wage in 2021 is $11, and $11 x 45 = $495, so this number would be your net pay minus $495. 

If your take-home pay is less than $495 per paycheck, your employer can’t withhold anything from your pay.

The total amount deducted from your pay can’t be more than the amount of the judgment, plus any additional costs, fees, and interest. The creditor’s court costs are usually included in the amount of the judgment, and some judgments also include the creditor’s attorney fees. Illinois judgments automatically accrue post-judgment interest at an annual rate of either 9% (for judgments of more than $25,000) or 5% (for judgments of $25,000 or less).

State law requires the creditor to send your employer an updated Certificate of Judgment balance every January 1, April 1, July 1, and October 1 until the judgment is paid in full.

How To Stop a Garnishment in Illinois

In rare cases, you may be able to contact the creditor and work out a payment arrangement that doesn’t involve wage deductions. Because you don’t have much negotiating power at this point, your chances of success are small. Depending on the size of your paycheck, the creditor may be facing a very long period of small payments trickling in, so they may be open to another payment arrangement. But the creditor was likely aware of this before proceeding with the garnishment order, based on your employer’s answers to the Citation to Discover Assets.

For the most part, there are only two ways to stop wage garnishments in Illinois. First, you can pay off the judgment. You may be able to pay the judgment in a lump sum, or you may have to wait for the garnishment to run its course. The second way to stop a garnishment is by filing bankruptcy . When you file bankruptcy, a section of the Bankruptcy Code called the automatic stay stops all debt collection efforts against you, including the garnishment. Through your bankruptcy, you may be likely to eliminate, or discharge , the judgment debt completely. Depending on your circumstances, you may be able to complete the forms and file Chapter 7 bankruptcy by yourself for free without hiring a lawyer. 

Are There Any Resources for People Facing Wage Garnishment in Illinois?

If you’re dealing with a wage garnishment, it may be helpful to consult with a licensed Illinois attorney to discuss your options. Even if you can’t afford to hire an attorney, there are legal aid organizations that may be able to help. These are some of the legal aid resources available in Illinois:

Chicago Volunteer Legal Services

DuPage Legal Aid

Greater Chicago Legal Clinic

Illinois Legal Aid Online

Land of Lincoln Legal Aid

Prairie State Legal Services

Legal Aid Chicago

Related Reading

• How To File Bankruptcy for Free in Illinois
• Your Guide to Illinois’ Debt Collection Laws
• Repossession Laws in Illinois
• How to Consolidate Your Debts in Illinois
• How to Become Debt Free With a Debt Management Plan in Illinois
• Eviction Laws and Tenant Rights in Illinois
• How to Settle Your Debts in Illinois
• How to Get Free Credit Counseling in Illinois

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Wage Garnishment Calculator

Voluntary Wage Assignments and Why You Should Avoid Them At All Costs

You would never hand over your paycheck to a creditor, would you?  Of course if you were under threat or order by a court you may hand over your paycheck; but never voluntarily. Right? Well, surprisingly many debtors do just that when they agree to “voluntary wage assignments.” A voluntary wage assignment is an agreement between a creditor and debtor that says the lender can deduct a certain amount of money from the debtor’s paycheck to repay a loan.

Voluntary wage assignments are commonly used by payday lenders. Surprised? You shouldn’t be.  Payday lenders understand that the reason debtors use their “services” is because they are financially strapped and desperate for cash.  But because their interest rates and fees are astronomically high, most debtors experience “payment shock” and may try to avoid paying them when the bill is due. So to protect their interests in the loan, payday lenders are now using voluntary wage assignments to increase their chances of getting paid.

How Voluntary Wage Assignment  Works

A voluntary wage assignment works just like a wage garnishment , except that the debtor has agreed to it. If a debtor defaults on the payday loan, the lender can then garnish the debtor’s wages without going to court. Once a debtor defaults on their payday loan, the lender will send the debtor a notice informing them that they plan to implement the voluntary wage assignment (i.e. wage garnishment).  This usually happens 20 days before the wage assignment notice is sent to the employer.   A wage assignment is valid for up to 3 years . In other words, the payday lender could technically garnish your wages for 3 years or until the loan is repaid.

For obvious reasons, agreeing to a wage assignment isn’t smart. You give the payday lender access to your wages and make it easier for them when you are not legally required to do so.  Signing a voluntary wage assignment can place you and your family in dire straits, if the lender garnishes wages that you need for your mortgage/rent, food and medical care. If you have signed a voluntary wage garnishment, you can revoke the agreement by sending the lender a letter.  Remember, Payday Loans are Dischargeable in Bankruptcy

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Illinois Wage Garnishment Calculator (2024 update)

You may have received a garnishment notice from your employer and wonder whether a wage garnishment calculator can help you estimate how much you will be garnished in Illinois. 

Wage garnishment in Illinois  is different from many other states, so how much will you be garnished?

Below is the Illinois wage garnishment that estimates how much you may be garnished. You can also compare 3 different options, how to stop wage garnishment, and the cost of those options. 

The calculator is free and does not even require an email address unless you’d like a free review of the data. Please note that this Illinois garnishment calculator is an estimate based on the laws below and may be different from the actual garnishment amount.

How Wage Garnishment in Illinois is Calculated

There are some states that do not allow wage garnishment, so those would not be in the calculator. Here are the specific Illinois wage garnishment laws that are factored into the IL wage garnishment calculator above.

"The amount of wages that may be deducted is limited by federal and Illinois law. (1) Under Illinois law, the amount of wages that may be deducted is limited to the lesser of (i) 15% of gross weekly wages or (ii) the amount by which disposable earnings for a week exceed the total of 45 times the federal minimum hourly wage or, under a wage deduction summons served on or after January 1, 2006, the minimum hourly wage prescribed by Section 4 of the Minimum Wage Law, whichever is greater. (2) Under federal law, the amount of wages that may be deducted is limited to the lesser of (i) 25% of disposable earnings for a week or (ii) the amount by which disposable earnings for a week exceed 30 times the federal minimum hourly wage."

Would the Garnishment Calculator Results be the Same in Chicago as Naperville?

Let’s say that Chicago has a higher minimum wage than Naperville or even that of Illinois. For example, Illinois minimum wage is $12.00. Could the calculation be different?

Many states take into consideration the federal minimum wage, and some states such as Maine may take into consideration state minimum wage, but that doesn’t mean the Illinois wage garnishment calculator would be different.

How Do Employers Calculate Wage Garnishment in Illinois?

Employers in Illinois may use the employer wage garnishment calculator to help estimate the garnishments amount for employees. Please note that the calculator feels a bit complex and not as simple to use.

Understanding Illinois Higher Order Priority in the Calculation 

First, the creditor requests a writ of execution from the Illinois court. Check an example Illinois writ of execution . Next, the court attaches an earnings withholdings to the write, which authorizes your employer to hold back money from your earnings.

Let’s say you have multiple earning withholding orders in Illinois that could include child support or alimony. Here’s the specific priority for the garnishment calculation in Illinois:

• Wage and Earnings Assignment Order for Support
• Earnings Withholding for Support
• Earnings Withholding for Taxes
• Earnings Withholding for Elder or Dependent Adult Financial Abuse
• Earnings Withholding Order

Now that we understand how the wage garnishment calculator works, let’s talk about how to stop wage garnishment in Illinois.

Options to Stop Wage Garnishment in Illinois

There are a few options that you can pursue to potentially stop a wage garnishment. The wage garnishment calculator provides the option to compare your different options to stop a garnishment.

File an Objection or Exemption

First, you can try to object to the wage garnishment. When you receive your garnishment documents, you can find instructions on how to object to the garnishment including filing deadlines. If not, you can reach out to the clerk of the court or contact a lawyer to help.

You may also attempt to claim an exemption to the garnishment in some states as well.

In Illinois, you’d file this garnishment exemption form to request an exemption from your garnishment. Please note that this may be difficult to receive.

File For Bankruptcy

Filing for bankruptcy in Illinois may eliminate a wage garnishment a judgment related to unpaid debt, especially in those instances when individuals are already living paycheck to paycheck. There are two common consumer bankruptcies to consider.

Chapter 7 Bankruptcy

A Chapter 7 bankruptcy in Illinois is the most affordable and most common bankruptcy in the United States. It is also the fastest, but you could lose assets if the equity that you own in that assets is about the Illinois bankruptcy exemptions .

You also may have to qualify via the Illinois bankruptcy means test. Below are the Illinois median income guidelines for bankruptcy cases filed on or after May 15, 2022. Please note you would add an additional $9,900 for household sizes greater than 9.

Chapter 13 Bankruptcy

A Chapter 13 bankruptcy in Illinois is a payment plan based bankruptcy. It often lasts 3 or 5 years, and you can often protect your assets in bankruptcy even if they are above the exemption. You may consider a Chapter 13 bankruptcy if some of the payments from the wage garnishment would not be discharged in a Chapter 7 bankruptcy.

If you are considering a Chapter 13 bankruptcy in Illinois, you may also want to compare that option to debt settlement. While you don’t have creditor protection in debt settlement, this option can sometimes be cheaper and faster than a Chapter 13 bankruptcy.

How much does it cost to file bankruptcy in Illinois?

You may have taken the wage garnishment calculator and see that it would take out too much of your pay, but now you are wondering whether you could even afford bankruptcy. Thankfully, most attorneys take payment plans for the attorney fees. Some attorneys take most of the Chapter 13 bankruptcy payments in the plan.

While the cost to file bankruptcy in Illinois is less expensive for the Chapter 13 ($313 vs $338), the attorney fees may be triple what you would pay for a Chapter 7 bankruptcy.

Please note that the filing fees can be waived if your income is below certain poverty thresholds. Here’s the Illinois poverty thresholds below.

Negotiate a Settlement

You may attempt to negotiate a settlement if it’s an unpaid debt. That said, the creditor has the upper hand generally in this position, so you may not get a major discount from the owed debt. Realistically, you may not be able to negotiate a settlement or backpay for support such as spousal or child support.

What Should You Do?

One question to consider is whether you can afford the amount being taken from your paycheck and understand the duration of how much will be taken.

For example, let’s say you live in Chicago or Aurora and are dealing with rental inflation, gas, and food. Let’s say you aren’t able to afford the garnishment. In that case, someone may consider an option such as bankruptcy.

If you are able to afford the garnishment, others may allow it to run its course or try to negotiate. Regardless, you can take the wage garnishment calculator for Illinois to inform your decision.