In Colorado, a creditor with a money judgment generally cannot take the full 25% of your paycheck that federal law allows. Under Colorado Revised Statutes section 13-54-104, the maximum that can be garnished from your disposable weekly earnings is the lesser of two amounts: 20% of your disposable weekly earnings, or the amount by which your disposable earnings exceed 40 times the state or federal minimum wage (whichever minimum wage is higher). This is more protective than the federal Consumer Credit Protection Act baseline, which caps garnishment at 25% of disposable earnings or the amount above 30 times the federal minimum wage. Colorado lowered the percentage from 25% to 20% and raised the protected floor from 30 to 40 times minimum wage in a 2019 law that took effect October 1, 2020, so more of your low- and middle-income wages stay in your pocket than in most states.
How Colorado's garnishment cap works
"Disposable earnings" means your gross pay minus the deductions the law requires your employer to withhold, such as federal and state income tax, Social Security, and Medicare. It does not mean your take-home pay after voluntary deductions like a 401(k) contribution, health insurance, or union dues. The garnishment is calculated on that disposable figure.
The garnishment is the smaller of the two formulas. First, take 20% of your disposable weekly earnings. Second, figure the amount of your disposable earnings above 40 times the applicable minimum wage. Whichever number is lower is the most a creditor can take for that pay period. The second formula creates a protected floor: if your disposable weekly earnings are at or below 40 times the minimum wage, an ordinary creditor cannot garnish your wages at all.
Colorado's state minimum wage is adjusted for inflation every January 1, so the dollar floor changes each year. As of 2025 the Colorado minimum wage was $14.81 per hour; the 2026 figure is set by an annual cost-of-living adjustment. Because the exact floor depends on the current minimum wage (and some cities like Denver set a higher local minimum wage that can apply), confirm the current Colorado minimum wage with the Colorado Department of Labor and Employment before doing the math rather than relying on an outdated number. The federal minimum wage remains $7.25, but Colorado's higher state rate controls because the statute uses whichever minimum wage is greater.
What income is exempt from garnishment
Many sources of income cannot be garnished by ordinary creditors at all. Under Colorado and federal law, these are generally protected:
Social Security, SSI, and SSDI benefits
Veterans (VA) benefits
Unemployment compensation
Workers' compensation benefits
Public assistance, such as TANF (Colorado Works), and most welfare benefits
Child support you receive for your children
Most pensions and retirement accounts, including Colorado PERA benefits and qualified plans
Disability benefits and certain insurance proceeds
The protection is strongest when these funds stay clearly identifiable. Federal rules require banks to automatically protect a baseline of directly deposited Social Security and certain federal benefits in your account, but once exempt money is mixed with other funds it can be harder to trace. Keep records showing the source of the money so you can prove the exemption if a creditor tries to reach it.
How a continuing wage garnishment works
To garnish wages in Colorado, a creditor must first sue you, win a money judgment, and then ask the court to issue a writ of continuing garnishment. That writ is served on your employer, who becomes the "garnishee" and must withhold the legally allowed amount from each paycheck and send it to the court or creditor. A continuing wage garnishment stays in effect across multiple pay periods until the judgment, interest, and costs are paid or the writ expires, so you usually do not have to be re-served for every paycheck.
Your employer is required to give you a copy of the writ along with an exemption notice and a blank objection form. Colorado law also protects your job: an employer generally cannot fire you because your wages are garnished for a single judgment debt. Read everything your employer hands you, because that paperwork starts the clock on your right to object.
How to claim an exemption or reduce the garnishment
If the garnishment is taking too much, includes exempt income, or is calculated incorrectly, you can fight it by filing a written objection (claim of exemption) with the court that issued the writ. The objection form is included with the garnishment papers your employer gives you. You typically must file it within a short window after you receive the writ, so do not wait. Once you file, the court schedules a hearing, usually within a couple of weeks, where you can show that some or all of the money is exempt or that the amount was miscalculated.
Colorado law also allows the court to reduce a garnishment based on financial hardship. If the standard 20% would leave you unable to cover basic living expenses, you can ask the court to modify the amount. Bring documentation of your income, household size, and necessary expenses such as rent, utilities, food, and medical costs. At the hearing, explain clearly why the garnishment should be lowered or stopped.
Steps to claim an exemption:
Act fast when you receive the writ and exemption notice; note the filing deadline printed on it.
Complete the objection form and state which exemptions apply (for example, that the funds are Social Security or below the protected floor).
File it with the correct court and serve a copy on the creditor as instructed.
Gather proof: pay stubs, bank statements, and benefit award letters showing the source and amount of your income.
Attend the hearing and present your evidence; the judge decides how much, if any, can be garnished.
Exceptions: support, taxes, and student loans
The 20% cap applies to ordinary debts like credit cards, medical bills, and personal loans. Different, higher limits apply to certain priority debts. Child support and spousal maintenance can reach a much larger share of disposable earnings under federal income-withholding rules, often 50% to 65%. Unpaid federal and state taxes can be collected through administrative levies that follow their own formulas, and defaulted federal student loans can be subject to administrative wage garnishment of up to 15% of disposable pay without a court judgment. If your garnishment is for one of these categories, the ordinary 20% rule does not control.
Where to verify and get help
Because minimum-wage figures and procedural deadlines change, verify the current rules before you rely on them. The Colorado Attorney General's Office, Consumer Protection Section (its public-facing consumer site is Stop Fraud Colorado) handles consumer complaints and publishes guidance on debt collection and your rights. The Colorado Department of Labor and Employment publishes the current state minimum wage. For the garnishment formula and exemptions themselves, the controlling source is the Colorado Revised Statutes, including section 13-54-104 on restrictions on garnishment and the broader exemption statutes in Article 54. The federal Fair Debt Collection Practices Act (FDCPA) separately limits how third-party debt collectors can contact you, and the federal Consumer Financial Protection Bureau accepts complaints against collectors. If you are unsure how the rules apply to your paycheck, consult a Colorado-licensed attorney or a nonprofit legal aid organization, especially before a garnishment hearing.
Official Colorado Sources
This page is based on Colorado law. Limits and deadlines change — verify the current details directly with the official Colorado sources below. This is general legal information, not legal advice.
Federal law also applies. Federal laws like the Fair Debt Collection Practices Act and Fair Credit Reporting Act protect you nationwide, on top of Colorado’s own rules.
Frequently asked questions
How much of my paycheck can a creditor garnish in Colorado?
For ordinary debts, the most a creditor can take is the lesser of 20% of your disposable weekly earnings or the amount by which those earnings exceed 40 times the applicable minimum wage. That is more protective than the federal 25% / 30x-minimum-wage cap. If your disposable earnings are at or below 40 times minimum wage, an ordinary creditor cannot garnish at all.
Is Social Security or disability income safe from garnishment in Colorado?
Yes. Social Security, SSI, SSDI, VA benefits, unemployment, workers' compensation, public assistance, and most pensions are exempt from garnishment by ordinary creditors under Colorado and federal law. Keep records showing the source of the funds so you can prove the exemption if a creditor tries to reach your bank account.
How do I stop or lower a wage garnishment in Colorado?
File the written objection (claim of exemption) form that comes with the garnishment papers with the court that issued the writ, before the deadline printed on the notice. You can show that income is exempt, that the amount was miscalculated, or that the garnishment causes financial hardship. The court will hold a hearing and can reduce or stop the garnishment.
Can I be fired for having my wages garnished in Colorado?
Generally no. An employer cannot terminate you because your earnings are garnished for any one judgment debt. If you believe you were fired for that reason, contact the Colorado Department of Labor and Employment or a Colorado employment attorney.
Do child support and student loans follow the same 20% limit?
No. Child support and spousal maintenance can reach 50% to 65% of disposable earnings, defaulted federal student loans can be garnished administratively up to 15%, and tax levies follow their own rules. The 20% Colorado cap applies to ordinary debts like credit cards and medical bills.
This article is general legal information, not legal advice, and may not reflect the most current law or the law in your jurisdiction. Laws vary by state and change over time. For advice about your specific situation, consult a licensed attorney.
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