In an attempt to collect a debt, the creditor first must go to court for a judgment affirming that the debt is owed. If the creditor is successful, the judgment allows the it to pursue bank levies and to file liens against the debtor's property. To garnish wages, a creditor must request from the court a garnishee summons. The creditor then serves the document on both the debtor and the debtor's employer. Once the notice is served, the debtor has 20 days to file an appeal.
Limits on Garnishment Amount
Wisconsin allows a maximum garnishment of 20 percent of the debtor's disposable earnings -- defined as gross income less federal, state and Social Security taxes -- or the amount by which wages exceed 30 times the federal minimum wage, whichever is less. State law does not usually allow more than one creditor to garnish a debtor at a time. But if a child support collection agency is also withholding income, the combined child support and garnishment may not exceed 25 percent of the debtor's net income.
Exemptions for Low-Income Workers
The state allows an exemption from garnishment for workers at the federal poverty level. If the garnishment lowers total household income below this threshold, the debtor is exempt from having his wages garnished. To raise this defense, however, the debtor must file an answer and a financial worksheet with the court. If the debtor has received means-tested benefits, such as Supplemental Security Income, SNAP benefits or other forms of public assistance at any time during the six months prior to the garnishment notice, he will be exempt from garnishment.
Administrative Garnishments in Wisconsin
Not all creditors must obtain a Wisconsin court judgment to begin seizing funds by garnishment. Wisconsin allows administrative garnishment of past-due child support without a judgment or court order. In addition, the federal government may collect back taxes and defaulted student loans through administrative garnishment proceedings. These collections have their own limits, as set by federal law. A debtor facing administrative garnishment can request a hearing and plead financial hardship to have the garnishment stopped. IRS rules allow that agency to levy wages, but must give the debtor time to appeal the levy or agree to an installment plan to make regular monthly payments.