Indiana Wage Garnishment Laws

Indiana did not invent a unique garnishment percentage. It adopted the federal limit set by 15 U.S.C. 1673 and codified it in its own statute, Ind. Code 24-4.5-5-105. The rule is a lesser-of test applied to one workweek of pay. A judgment creditor may garnish the smaller of two figures: twenty-five percent of the debtor’s disposable earnings for that week, or the amount by which those disposable earnings exceed thirty times the federal minimum hourly wage. With the federal minimum at $7.25 an hour, that second figure protects roughly the first $217.50 of weekly disposable pay from any ordinary garnishment. The statute closes with a command aimed at the bench rather than the creditor: “no court may make, execute, or enforce an order or process in violation of this section.”

That raises a question almost nothing written about Indiana garnishment answers: why does a ceiling that lives in the state’s Uniform Consumer Credit Code govern a hospital bill, a repossession shortfall, or a landlord’s damages award, none of which is consumer credit? The answer is one sentence long and it turns on two semicolons. Ind. Code 24-4.5-5-102 says this Part applies “to actions or other proceedings to enforce rights arising from consumer credit sales, consumer leases, and consumer loans; to garnishments of the earnings of an individual; and, in addition, to extortionate extensions of credit.” Three independent limbs, and the middle one carries no consumer-credit qualifier at all. The 25 percent cap is not a consumer-credit rule borrowed for other debts by analogy; by the chapter’s own scope provision it reaches every garnishment of an individual’s earnings in Indiana, whoever the creditor is and whatever the debt was.

The phrase that trips people up is “disposable earnings.” It does not mean take-home pay after the debtor’s rent, car payment, and groceries. It means gross pay minus only the deductions the law requires the employer to make, chiefly federal and state income tax withholding, Social Security, and Medicare. Voluntary deductions such as a retirement contribution, a health-plan upgrade, or union dues do not shrink the disposable-earnings base. That distinction matters, because a debtor who loads up voluntary deductions to look poorer on paper does not actually reduce what is garnishable.

One more Indiana wrinkle sits inside the same statute. A court may, for cause, reduce an ordinary garnishment below the twenty-five percent ceiling, and the floor it can drop to is ten percent of disposable earnings. So twenty-five percent is the maximum, not a guaranteed amount; a debtor who shows hardship can ask the court to take a smaller bite. The cap, the floor, and the thirty-times-minimum-wage exemption together describe how much a single ordinary judgment can pull from one paycheck. They do not describe how the garnishment gets started, which is where Indiana procedure diverges from what most online calculators show.

This is the heart of Indiana collection and the reason this page exists. Indiana does not issue a standalone writ of garnishment the way some states do. Instead, a judgment creditor enforces by filing a proceedings supplemental to execution, governed by Indiana Trial Rule 69(E) and the post-judgment remedy statutes at Ind. Code 34-55. A proceedings supplemental is not a new lawsuit; it is a continuation of the original case, reopened on the creditor’s motion to identify and reach the debtor’s non-exempt property and income.

The motion is supported by an affidavit stating that the debtor has income or property that has not been applied to the judgment. The court then issues an order, often a subpoena, requiring the debtor to appear and answer questions under oath about employment, bank accounts, and assets. To garnish wages specifically, the creditor names the employer as a garnishee defendant and serves the employer with the proceedings supplemental as well, because the employer, not the debtor, is the party that will actually withhold and remit the money. The employer answers as to what it owes the debtor, and after the hearing the court enters a final order in garnishment directing the employer to deduct the allowed amount each pay period and pay it into court or to the creditor.

The mechanics in Trial Rule 69(E), effective in its current form since January 1, 2019, are unusual enough to repay reading closely. The rule opens “notwithstanding any other statute to the contrary“, so it displaces the general attachment and garnishment statutes rather than sitting alongside them. The motion is verified or supported by affidavits and filed in the court that rendered the judgment, alleging that the creditor owns the judgment, that it has no cause to believe a levy of execution will satisfy it, and, if a garnishee is named, that the garnishee holds property of or owes an obligation to the debtor. If the motion meets those requirements the court orders the appearance “ex parte and without notice” — the debtor is heard at the hearing, not before the order issues.

Then the rule splits service in two, and this is where Indiana filings quietly die. The judgment debtor is served “as provided in Rule 5”, the ordinary service due a party already in the case. The garnishee employer is entitled to service of process as provided in Rule 4, because it is not in the case yet and is being brought in as a new party, to be served like a defendant. The date fixed for the appearance or for answering interrogatories must be “not less than twenty [20] days after service“, and “no further pleadings shall be required.” The rule also opens the ordinary discovery provisions to both sides “in aid of the judgment or execution”, which is the formal route to an employment answer when the debtor will not volunteer one.

Employers on the receiving end of one of these orders normally want to know two things, and Ind. Code 34-55-8-5 answers both. The statute does not describe the garnishee as an employer at all; it describes a person who “is or will be periodically indebted to the judgment debtor in any amount,” the amount “determined periodically as it becomes due and payable.” That phrasing is why a payroll is reachable, and why a recurring commission or a standing contractor invoice is reachable on the same footing. On the second question, subsection (b) is explicit: the garnishee “shall not be required to appear personally in court unless the judge of the court orders their personal appearance,” and subsection (c) lets the court order interrogatories instead. A written answer from payroll is the normal outcome; a manager in a courtroom is the exception.

Several practical points follow from this structure. First, naming the right employer is mandatory; a proceedings supplemental served on a former employer, a misnamed entity, or a staffing agency that no longer pays the debtor produces a dead order. Second, the employer is entitled to a statutory handling fee, set by Ind. Code 24-4.5-5-105 at the greater of $12 or three percent of the total to be deducted under that judgment, split evenly so half is borne by the debtor and half by the creditor. Third, because the whole process turns on identifying where the debtor works, the locate is not an afterthought, it is the gating step. A creditor who cannot name the employer cannot file an effective garnishment, no matter how clean the judgment is.

The employer’s fee has more structure to it than the headline number suggests, and the details decide who absorbs it. The fee “may be collected by an employer only once for each garnishment order or series of orders arising out of the same judgment debt,” so a creditor who amends or re-serves an order on the same debt does not generate a second charge. The employer may take the whole fee out of the first deductions or “collect the fee ratably over the number of pay periods” instead. The deductions “do not increase the amount of the judgment debt” for the purpose of calculating or collecting judgment interest, which is the point creditors most often get backwards. And the deduction “is not an assignment of wages under IC 22-2-6”, so it does not carry that chapter’s consent and revocation machinery. A separate and much smaller fee of $2 per deduction applies where the employer is withholding under a child-support judgment.

Read down the table and a theme repeats: Indiana garnishment is less about the percentage than about doing the procedure correctly and quickly against the right employer. The cap is fixed and modest. The advantage goes to the creditor who locates the debtor’s current payroll, files a clean proceedings supplemental, and serves it before the line forms. A wider view of how Indiana stacks up against other jurisdictions is collected in our wage garnishment laws by state reference.

This is the first question most employees ask when a garnishment order reaches payroll, and Indiana answers it in a single sentence. Ind. Code 24-4.5-5-106 provides that “no employer shall discharge an employee for the reason that a creditor or creditors of the employee has subjected or attempted to subject unpaid earnings of the employee to garnishment or like proceedings directed to the employer for the purpose of paying a judgment or judgments.”

Three details in that sentence do real work, and they are easiest to see next to the federal rule. 15 U.S.C. 1674(a) says no employer may discharge an employee because his earnings “have been subjected to garnishment for any one indebtedness.” Federal protection is commonly read as running out once a second, unrelated garnishment arrives. Indiana’s statute contains no such limit. It is written in the plural on both sides — “a creditor or creditors“, “a judgment or judgments” — so a worker facing two separate Indiana judgments is not outside the state prohibition the way the single-indebtedness reading places them outside the federal one. And Indiana reaches the employer who fires someone over a garnishment that was merely attempted, which covers the case where an order is served, answered, and produces nothing because the protected floor swallowed the check.

One boundary, stated because the honest version of this is more useful than a confident one: section 106 sets out the prohibition and, on its face, states no penalty and no private right of action. Federal law supplies a criminal penalty for a willful violation of 1674; Indiana’s section is silent about remedy, and whether Indiana courts imply a civil claim from it is a question for an Indiana attorney rather than something to be asserted on a research firm’s page. What can be said is what the statute says: the discharge is prohibited, and the prohibition is broader than the federal one it sits beside.

Because the proceedings supplemental is built to reach any non-exempt income or property, wages are only one target. The same motion can reach a debtor’s bank account by naming the bank as garnishee, and a bank levy in Indiana is often faster to collect than a wage garnishment because it captures a balance in a single stroke rather than a slow percentage of each check. The catch is the same one that governs wages: you have to know where the debtor banks before you can name the right financial institution.

That route is written into the same section as the wage lien. Ind. Code 34-55-8-7(d) directs a court in proceedings supplementary to execution to order a depository financial institution to place a hold on a deposit account in which the judgment debtor has an interest, subject to the limits on the duration of the restriction and the amount restricted set by IC 28-9-4-2; subsection (e) then gives the account holder a hearing to claim particular funds as exempt from garnishment. Subsections (a) and (b) add a lever most creditors never use. The court may order non-exempt property, income or profits, or any debt due to the debtor, applied to the judgment, and may forbid transfers of property and choses in action while it does so. Where the debtor has failed to comply with an agreed order, the statute stops saying “may” and says “shall.”

Indiana also shields a defined set of assets from creditors entirely, and a creditor who garnishes into exempt property wastes the effort and can draw a sanctions motion. The state’s personal-property and homestead protections, the bankruptcy schedule a debtor may invoke, and the time limits on enforcing the judgment all shape what is realistically collectible. We keep companion references on Indiana’s asset exemptions from creditors, the Indiana bankruptcy exemptions a debtor can claim, and the Indiana debt collection statute of limitations that caps how long the underlying claim and judgment stay enforceable. Read together, they answer the practical question behind every garnishment: not just how much the law allows, but how much this particular debtor actually has within reach.

Two sets of Indiana dollar figures sit near this topic and they behave in opposite ways, which is worth knowing before relying on any number you read. The exemption amounts are indexed: Ind. Code 34-55-10-2.5 has the Department of Financial Institutions reset them every six years by the Consumer Price Index for All Urban Consumers, rounded to the nearest $50, and the current set at 750 IAC 1-1-1(c) took effect March 1, 2022 and is next adjusted no later than March 1, 2028. The garnishment fees are not indexed at all. Indiana runs a second, unrelated index for its consumer credit code at Ind. Code 24-4.5-1-106, on a different price series and on odd-numbered years, and section 24-4.5-5-105 is on neither list — the department’s rule republishes fifteen IC 24-4.5 provisions including 24-4.5-5-103(7) from this very chapter, and the garnishment section is not among them. The $12 employer fee and the $2 support fee were last set by the legislature in 2014 and do not move.

That indexing does not reach a paycheck, either. Section 34-55-10-2(c)(3)’s intangible-property exemption expressly excludes “debts owing and income owing,” and wages the employer has not yet paid out are income owing, so the exemption dollars do not stack on top of the 25 percent cap. Once the money is deposited it becomes a deposit account and the bank-hold route above governs instead. The schedule itself belongs to the exemptions reference linked above rather than being restated here.