In Indiana, a creditor with a court judgment cannot take more than 25% of your disposable earnings in any workweek, and it cannot touch your wages at all in a week where your disposable earnings are 30 times the federal minimum hourly wage or less. This rule comes from Indiana's version of the Uniform Consumer Credit Code, found at Indiana Code 24-4.5-5-105, and it mirrors the federal limit in the Consumer Credit Protection Act (15 U.S.C. 1673). The garnishment is the lesser of those two figures: either 25% of disposable earnings, or the amount by which your disposable earnings exceed 30 times the federal minimum wage that week.
Unlike a handful of states (such as Texas, Pennsylvania, North Carolina, and South Carolina) that ban or sharply restrict wage garnishment for ordinary consumer debts, Indiana does allow garnishment for credit cards, medical bills, personal loans, and similar judgments. But it does not let a creditor take more than the federal cap, and in some situations Indiana's procedural protections make it harder for a creditor to start or stack garnishments.
How Indiana Calculates the Garnishment Amount
"Disposable earnings" means what is left after your employer withholds amounts required by law, such as federal and state income tax, Social Security, and Medicare. It is not your gross pay, and it is not your take-home pay after voluntary deductions like a 401(k) or health insurance. The garnishment percentage is applied to that disposable figure.
The federal minimum wage is $7.25 per hour as of 2026. Thirty times that figure is $217.50 per week, which is the floor Indiana protects. If your disposable earnings for the week are $217.50 or less, no garnishment can be taken. If they are above that, the creditor gets the lesser of 25% of disposable earnings or the amount over $217.50. Because the federal minimum wage can change, confirm the current figure with the U.S. Department of Labor before relying on a specific dollar amount.
Here is how the math works in practice. Suppose your weekly disposable earnings are $600. Twenty-five percent is $150. The amount over $217.50 is $382.50. The creditor takes the lesser figure, so the garnishment is $150 that week. For someone earning closer to the floor, say $260 in disposable earnings, 25% is $65 but the amount over $217.50 is only $42.50, so the creditor can take just $42.50.
Only One Garnishment at a Time for Most Debts
Indiana generally limits how garnishments stack. The 25% ceiling is a total cap, not a per-creditor cap, so multiple ordinary judgment creditors cannot combine to take more than 25% of your disposable earnings. Typically the first creditor to serve the garnishment order is paid first, and others wait in line until that judgment is satisfied. This matters if you have several judgments, because it prevents your paycheck from being drained by everyone at once.
Debts That Can Exceed the 25% Cap
The 25% limit applies to ordinary consumer and commercial debts. Several categories are treated differently and can reach deeper into your wages:
- Child support and spousal support. Under federal law and Indiana income-withholding rules, support orders can take up to 50% of disposable earnings if you are supporting another spouse or child, or up to 60% if you are not, with an extra 5% allowed when you are more than 12 weeks behind.
- Unpaid federal and state taxes. Tax authorities, including the IRS and the Indiana Department of Revenue, follow their own collection rules and are not bound by the 25% consumer cap.
- Federal student loans. The U.S. Department of Education can use administrative wage garnishment of up to 15% of disposable pay without first suing you in court.
Income That Is Exempt From Garnishment
Certain income keeps its protected character even after it is deposited in your bank account, and a creditor generally cannot garnish it. Common exempt sources include: