How to Stop Wage Garnishment in Colorado

• Filing for bankruptcy can stop a garnishment before it starts, including while the creditor’s lawsuit is still pending.

• A creditor generally must sue you and win a money judgment before it can garnish your wages for a consumer debt.

• Your employer must send you a copy of the writ and a Notice of Garnishment.

• Withholding cannot start until the first payday at least 21 days after your employer was notified. 

• For most consumer debts, the Colorado wage garnishment percentage is no more than 20 percent of weekly disposable earnings.

• Once a creditor learns about your bankruptcy, it must release the garnishment.

• Filing for bankruptcy does not stop garnishments for domestic support obligations, like child support. 

In Colorado, a creditor with a court-approved wage garnishment can take up to 20 percent of your disposable earnings. A wage garnishment order stays active on your paycheck for 182 days at a time. 

Colorado law limits how much a creditor can take from a paycheck. For most Colorado consumer debts, a creditor can only garnish the smaller of two calculations based on your weekly disposable pay (the income you make after required taxes and deductions). 

• Calculation A: 20 percent of your weekly disposable income

• Calculation B: Any earnings above $606.40 a week—equal to a 40-hour paycheck at Colorado’s current minimum wage of $15.16/hr. 

If you make $606.40 or less in weekly disposable pay, your wages cannot be garnished at all. C.R.S. 13-54-104

What This Means For Your Paycheck

Weekly Disposable Pay Example	Max Deducted Per Week	Total Over 182 Days (6 Months)
$606.40 or less	$0 (fully protected)	$0
$700	$93.60	$2,433.60
$1,000	$200	$5,200

Source: C.R.S. 13-54.5-102(2)

What Happens After 182 Days?

A single garnishment writ expires after 182 days. If you still owe money after the writ expires, the creditor can get a new one, resetting the clock on garnishments. 

Filing for bankruptcy generally puts an immediate legal stop (called a “stay”) to wage garnishment.

A bankruptcy petition “operates as a stay, applicable to all entities” 11 U.S.C. 362(a). A judge doesn’t have to sign anything. While the stay is in effect, creditors generally can’t start or continue garnishing your wages, even on a judgment they won before you filed. 

The automatic stay generally stops collection efforts on consumer and federal debts as well.

A garnishing creditor must release the garnishment once it learns of your bankruptcy, and the release must reach your employer. A creditor that willfully violates the stay can owe you actual damages, including costs and attorneys’ fees, and in some cases, punitive damages. The stay doesn’t stop: 

• Withholding for domestic support obligations, like child support

• Withholding to repay a loan from your employer’s retirement plan

• Collection after certain repeat filings

If one prior case was dismissed in the past year, the stay ends after 30 days unless the court extends it. If two or more were dismissed, it never takes effect. 

Chapter 7 and Chapter 13 are the main bankruptcy options available to individuals facing wage garnishment. Both immediately stop current and impending wage garnishment upon filing, but each treats your future paychecks differently.

Chapter 7	Chapter 13
Keeps your future paychecks out of the bankruptcy case	Uses your future paychecks for the repayment plan.

Under Chapter 7, there is no repayment plan. Your earnings after filing aren’t treated as part of the bankruptcy estate. 11 U.S.C. 541. 

The Means Test

The means test applies under 11 U.S.C. 707(b)(1) when you primarily have consumer debts. You must report your monthly income and abuse calculations. Annualized household income at or below Colorado’s median ($87,940 for one earner and $153,501 for a four-person household) is protected from motions to dismiss under 11 U.S.C. 707. 

For guidance on comparing your household’s income to the median, see our article about the Chapter 7 means test. 

In a Chapter 13, earnings received after filing become part of the bankruptcy estate. This remains true until the case is closed, dismissed, or converted under 11 U.S.C. 1306(a)(2). 

After the plan is confirmed, the court may order your employer to pay income to the trustee under 11 U.S.C. 1325(c) within 30 days after filing. The repayment plan must pay priority claims in full unless the creditor agrees otherwise. These plans tend to last three to five years if your income is below the state median and five years if it is above the median, unless all creditors are paid in full over a shorter period of time. Unsecured debts must be under $526,700, and secured debts must be under $1,580,125, as 11 U.S.C. 109(e) mandates.

Not always. A Chapter 7 discharge does not eliminate the following debts:

• Certain taxes

• Domestic support obligations

• Government-backed and qualified student loans (absent undue hardship)

• Government fines that aren’t compensation for actual loss

Fraud, fiduciary fraud, and willful-injury debts only survive the bankruptcy discharge if the creditor asks the court to except them and the court agrees. 11 U.S.C. 523(c)(1)

Similarly, a Chapter 13 discharge does not eliminate the following debts:  

• Domestic support obligations

• Covered student loans

• Criminal restitution or fines

• Damages for willful or malicious injury causing personal injury or death 11 U.S.C. 1328(a)

If bankruptcy looks like the right path, a few requirements must be met before you file. Learn more about Chapter 13 in our Chapter 13 Bankruptcy in Colorado: Eligibility & Costs article.

If your wages are already being garnished, you may be able to recover the money taken from your paycheck in the 90 days leading up to your bankruptcy filing, according to 11 U.S.C. 547. But there are some limits: 

• You can’t recover garnishments less than $600 in an individual consumer-debt case. Courts disagree on whether multiple garnishments by one creditor are added together. 

• Garnishments for domestic support can’t be recovered. 

Your bankruptcy attorney can file a motion or an adversary proceeding to recover the garnished wages, but only for up to what your exemptions protect. 

Colorado residents must use state bankruptcy exemptions rather than federal ones. Under C.R.S. 13-54-102, these include: 

• Tools of the trade

• Child support payments 

• Utility and security deposits 

• Certain retirement and pension funds 

• Court-ordered child support and maintenance 

• Public or private disability benefits 

• Child support payments

• Household goods

• Motor vehicles

• Clothing and jewelry

• Income tax refunds

Filing for bankruptcy generally stops the garnishment and may let you recover some recent deductions, but that’s only the beginning. For individual debtors, what happens to the paychecks you earn after filing depends on which chapter of bankruptcy you file under. 

Bankruptcy isn’t always the best option to stop wage garnishment. In fact, you may not fully benefit from filing for bankruptcy to stop wage garnishment in the following circumstances:

• Non-Dischargeable support debts - Under Colorado law, garnishment for child support, maintenance combined with child support, or child support debts hold statutory priority over other garnishments and liens, and remain enforceable.

• Prior bankruptcy filings: If you had a bankruptcy case dismissed within the last 12 months, that court protection expires after just 30 days. To keep your protection active past 30 days, you and your attorney have to ask the court for an extension and prove you filed this new case in good faith—not just to delay creditors. 11 USCS § 362

• Significant asset exposure: In a Chapter 7 liquidation, filing bankruptcy to stop a garnishment may expose nonexempt assets to the bankruptcy trustee. For example, if you have significant nonexempt assets (such as stocks and bonds), the Chapter 7 trustee can demand you turn them over to pay creditors.

Bankruptcy is not the only way to stop wage garnishment. Your options depend on the type of debt you have, the status of the court case, applicable exemptions, and how quickly you act. Alternatives to bankruptcy to stop wage garnishment in Colorado include:

• Negotiate with the creditor - A creditor may agree to a settlement, a new payment plan, a pause on collection, or release the garnishment after receiving an agreed-upon payment. Any agreement should be in writing and should state whether the creditor will reduce, suspend, or release the garnishment. 

• Challenge an incorrect garnishment calculation - A garnishment may be reduced if your employer or creditor calculated the withholding incorrectly. If you find errors, an attorney can help you address the mistakes through the required court procedure.

• Claim an exemption or request a court hearing - Some wages, benefits, and other funds are protected from garnishment. You may be able to file an objection or claim of exemption and request a hearing. Your employer generally cannot decide whether an exemption applies. You usually must assert the exemption through the court process.

• Ask the court to set aside or modify the judgment - If you did not receive proper notice of the lawsuit or you have another legally recognized basis to challenge the judgment, you may be able to ask the court to set it aside. If the judgment is vacated, the garnishment may also be stopped.

• Pay or settle the judgment - The garnishment can end when the judgment, accrued interest, and allowable costs have been paid in full. Before making a final payment, you should request a current payoff amount.

• Address special types of debt directly - Different procedures may apply to child support, spousal maintenance, taxes, federal student loans, and other government-related debts. Ordinary consumer-debt exemptions and garnishment limits may not apply in the same way.

• Consider a debt-management strategy - If the garnishment is only one part of a larger debt problem, a broader plan may help prevent additional collection actions. Options can include negotiating several debts, prioritizing secured and essential obligations, voluntarily selling nonessential property, or using available income to resolve the judgment.

Important Timing Considerations

Garnishment papers should be reviewed immediately. The deadline to object, claim an exemption, challenge a judgment, or request a hearing may begin when you, your employer, or your financial institution receives the relevant documents. Waiting can result in continued withholding or loss of an available remedy.

The best option depends on the kind of debt, whether the judgment is valid, the source and amount of income, available exemptions, and the applicable deadline. One of our garnishment attorneys can help you determine whether one of these bankruptcy alternatives is available to you.

For most consumer debts, a creditor must sue in civil court and win before it can garnish your wages. These are the signs a creditor is seeking to garnish your wages:

• Summons and complaint - You are served with lawsuit paperwork. In county court, the summons lists a date and time by which you must file an answer. If you don’t, the creditor can ask the court for a default judgment. In district court, you generally have 21 days to file an answer after being served. 

• A money judgment - If you do not respond to the summons, the court enters a default judgment against you

• Questionnaire (JDF 105 SC) - You receive court-approved questions about where you work, what you earn, and where you bank. Answers are due within 14 days of receiving them. Creditors use this information to find your employer.

• Your employer sends notice - After the creditor serves a Writ of Continuing Garnishment (C.R.C.P. Form 26) on your employer, your employer has seven days to send you a copy of the writ, a Notice of Garnishment, and an estimate of how much will be withheld. 

Withholding begins on the first payday that occurs at least 21 days after your employer was served. If you were considering bankruptcy before the notice of garnishment, the time between notice and the first deduction is an opportune time to file. 

Yes, in some cases involving federal debts. Federal taxes are one example: the IRS must send a Final Notice of Intent to Levy at least 30 days before levying wages under 26 U.S.C. 6330(a). 

Another example, federal student loans: the Department of Education must give at least 30 days’ notice before garnishment begins under C.F.R. 34.4. 

The garnishment in place today keeps taking from every paycheck until someone files something. Robinson & Henry’s Front Range wage garnishment attorneys can provide legal guidance in situations where: 

• You want to know whether the automatic stay would stop your garnishment, and whether Chapter 7 or Chapter 13 would benefit you

• You already filed for bankruptcy, and the garnishment hasn’t stopped

• You need a bankruptcy attorney to review your materials for filing

With numerous offices around Denver and Colorado Springs, Robinson & Henry’s bankruptcy team can review your garnishment and your options. Call 303-688-0944 or schedule a case assessment.