How Bankruptcy Stops Wage Garnishment in Arizona

Stop Wage Garnishment in Arizona with Bankruptcy

Wage garnishment can drain your take-home pay and make day-to-day life feel impossible. In Arizona, a mix of federal rules and state law—updated by Proposition 209—now sets stronger limits on how much of each paycheck creditors can reach. If you’re dealing with past-due debts, child support, taxes, or student loans, understanding your rights can help you keep essential income and make a plan that actually works.

Below, we explain which debts trigger garnishment, how much can be taken in Arizona after Proposition 209, and how bankruptcy can pause garnishments through theautomatic stay. If you’re already seeing money withheld—or you’ve gotten a warning letter—talking to an Arizona bankruptcy attorney can provide fast, practical options.

When Can Creditors Garnish Wages in Arizona?

For most consumer debts, a creditor must first sue you and win a court judgment. With that judgment, the creditor can ask the court for a garnishment order and direct your employer to withhold part of your pay until the debt is satisfied.

Some obligations don’t require a standard civil judgment to start withholding:

• Child support / spousal maintenance: Withholding is built into court orders and can continue despite other protections.
• Taxes (federal or state): The IRS or Arizona Department of Revenue can levy wages administratively.
• Federal student loans: Administrative wage garnishment is possible after notice and an opportunity to request a hearing or plan.

How Much Can Be Garnished in Arizona (Post-Prop 209)?

For most consumer debts (not support orders), Arizona now protects more of your paycheck. The maximum part of your disposable earnings (pay after legally required deductions) subject to garnishment is the lesser of: 10% of disposable earnings, or the amount by which your earnings exceed 60× the highest applicable minimum wage (federal, state, or local). Courts may reduce the 10% cap to 5% if you proveextreme economic hardship. Domestic support orders follow different, higher federal limits and are not changed by Proposition 209.

Because Arizona’s minimum wage adjusts over time, the “60× minimum wage” threshold moves too. A quick way to think about it: first calculate your disposable earnings for the pay period, then compare (a) 10% of that number and (b) what’s left after subtracting 60× the current applicable minimum wage—whichever result issmaller is the most a typical consumer-debt creditor can take.

Practical Ways to Lower or Stop a Garnishment

• Ask for a hardship reduction: If 10% would cause severe hardship, you can ask the court to reduce withholding to 5% and provide proof (paystubs, rent, childcare, medical costs).
• Check the math: Verify the court used the highest applicable minimum wage and applied the 60× threshold correctly; mistakes happen.
• Negotiate a stipulation: Creditors sometimes accept lower voluntary payments in exchange for pausing garnishment—get it in writing.
• Consider bankruptcy for immediate relief: Filing triggers the automatic stay, which stops most garnishments at once (support orders are treated differently).

Bankruptcy’s Automatic Stay: Immediate Relief

Filing chapter 7 or chapter 13 creates an automatic stay that halts most garnishments. In chapter 7, eliminating credit cards, medical bills, and other unsecured debts can free up your paycheck; some debts (support, recent taxes, most student loans) typically survive. In chapter 13, you repay over 3–5 yearsunder a court-approved plan—creditors must follow the plan instead of garnishing directly, and you can catch up on priority debts in an orderly way.

Child Support, Taxes & Special Priorities

Domestic support obligations (child support and spousal maintenance) have their own rules and higher caps. They’re generally not discharged in bankruptcy, and withholding can continue unless you set up a compliant plan (often via chapter 13) and keep current going forward. Tax levies can often be paused by bankruptcy, but many recent taxes remain payable; a chapter 13 plan can spread those payments over time.

Smart Next Steps (Starting Today)

• Open every letter and email. Court and creditor notices contain deadlines and formulas you can challenge.
• Collect paystubs and a budget. You’ll need them to prove hardship, negotiate, or file a chapter 13 plan.
• Confirm the balance and fees in writing. Ask for an accounting; you’re entitled to clarity on what you owe.
• Know your other protections. Prop 209 also raised several exemptions (like a higher protected bank balance), which can help stabilize finances while you resolve the garnishment.

Arizona Wage Garnishment FAQs

How much of my paycheck can be garnished in Arizona?

For most consumer debts, it’s the lesser of 10% of disposable earnings or the amount above 60× the highest applicable minimum wage for your pay period. Courts can reduce that to 5%for extreme hardship. Support orders (child/spousal) follow different federal limits.

Can I ask the court to lower my garnishment because I can’t afford basics?

Yes. You can request a hardship reduction to 5%. Bring proof of income and essential expenses (rent, utilities, childcare, medical). The judge decides based on the evidence you provide.

Will bankruptcy stop a garnishment that already started?

In most cases, yes—once you file, the automatic stay stops most new deductions. Support orders are treated differently. In some situations, a portion of wages garnished shortly before filing may be recoverable; ask your attorney about timelines and amounts.

Do Proposition 209’s limits apply to child support?

No. Prop 209 didn’t change support-order withholding rules. Child support and spousal maintenance follow separate federal caps and keep priority even in bankruptcy.

My garnishment started years ago—do the new rules help me?

Often yes. Wages earned after Prop 209’s effective date use the newer 10%/60× formula, even if an older garnishment was already in place. How the change applies can be fact-specific—an attorney can review your dates and paperwork to confirm.

This article is general information, not legal advice. Deadlines move quickly—speak with an Arizona attorney about your specific situation and documents.