How To Stop Wage Garnishment in Colorado

You can stop wage garnishment in Colorado through these legal methods:

1. File for bankruptcy to get an automatic stay

2. Submit a Claim of Exemption form within 14 days of garnishment notice

3. Negotiate a settlement directly with the creditor

4. Request a court-ordered payment plan as an alternative

5. Contest the judgment if there were legal errors in the case

6. Determine if your income source is legally exempt from garnishment

Each method has specific requirements and timelines that must be followed precisely to successfully stop garnishment of your wages in Colorado.

What Is Wage Garnishment?

Wage garnishment in Colorado is a legal procedure where a portion of your earnings is withheld by your employer and sent directly to a creditor to satisfy a debt. This happens after a creditor has obtained a court judgment against you. In Colorado, creditors can garnish up to 25% of your disposable income, depending on your earnings and the type of debt. The Colorado Rules of Civil Procedure Rule 103 governs the garnishment process in the state.

Understanding Wage Garnishment in Colorado

Before seeking to stop a wage garnishment, it’s important to understand how the process works in Colorado:

• Colorado Garnishment Law: Falls under C.R.S. § 13-54-104 and follows both state and federal regulations

• Writ of Garnishment: The legal document issued by Colorado courts that authorizes your employer to withhold wages

• Garnishment Limitations: Colorado law limits garnishment to 25% of disposable earnings or amounts exceeding 40 times the federal/state minimum wage

• Garnishment Duration: Continues until the debt is paid in full unless legally challenged

• Multiple Garnishments: Colorado follows specific priority rules when multiple creditors seek garnishment

Legal Ways to Stop Wage Garnishment in Colorado

1. File for Bankruptcy Protection

Filing for bankruptcy with the U.S. Bankruptcy Court for the District of Colorado immediately implements an “automatic stay” that stops most garnishments.

• Chapter 7 Bankruptcy: Liquidates non-exempt assets to pay creditors and can eliminate most unsecured debts within 3-6 months.

• Chapter 13 Bankruptcy: Establishes a repayment plan lasting 3 to 5 years, allowing you to gradually pay off debts while safeguarding your assets.

• Filing Fees: $338 for Chapter 7 and $313 for Chapter 13 (as of April 2025), though fee waivers may be available

• Credit Counseling Requirement: Must complete approved credit counseling within 180 days before filing

Filing bankruptcy should be considered carefully as it has long-term effects on your credit score and financial future.

2. Challenge the Garnishment with a Claim of Exemption

Colorado law provides certain exemptions under C.R.S. § 13-54-102 and § 13-54-104 that may protect your income from garnishment:

• Head of household exemption: If you provide more than 50% of support for a dependent, garnishment is limited to 15% of disposable earnings rather than 25%

• Low-income exemption: If your weekly earnings are less than 40 times the state or federal minimum wage (whichever is higher), you may be exempt

• Hardship exemption: Available in cases where garnishment would create extreme financial hardship

To file a claim of exemption:

1. Complete the “Claim of Exemption” form JDF 28 available from the Colorado Judicial Branch website or court clerk

2. File within 14 days of receiving the garnishment notice

3. Attend the exemption hearing to present your case

4. Bring documentation to prove your exemption status (tax returns, dependent support evidence, etc.)

3. Negotiate a Settlement with the Creditor

Often, creditors will accept a lump-sum settlement for less than the full amount owed to avoid the uncertainty of collection.

• Request a written settlement agreement before making any payments

• Ensure the agreement specifically states that the garnishment will be released upon payment

• Consider debt settlement companies or consumer credit counseling services in Colorado

• Consider seeking legal advice before finalizing any settlement

4. Request a Court-Ordered Payment Plan

Colorado courts may allow you to set up a payment plan as an alternative to garnishment under C.R.C.P. 103.

• File a motion with the Colorado district or county court that issued the garnishment order

• Propose a reasonable payment plan based on your financial situation with a detailed budget

• Attend the hearing prepared to explain your financial circumstances

• If approved, the court will issue an order stopping the garnishment as long as you make the agreed payments

5. Contest the Judgment if Errors Exist

If the judgment was obtained improperly, you may be able to challenge it by:

• Filing a Motion to Set Aside under C.R.C.P. 60(b)

• Demonstrating that you were not properly served notice of the lawsuit (improper service)

• Proving errors in the creditor’s case or calculation of the debt

• Showing the statute of limitations has expired (typically 6 years for most debts in Colorado)

• Establishing identity theft or mistaken identity

6. Debt Management Alternatives

Some alternatives may help address the underlying debt problem:

• Debt Consolidation Loans: May help pay off judgment creditors and stop garnishment

• Credit Counseling: Organizations like Consumer Credit Counseling Service of Colorado can help negotiate with creditors

• Debt Management Plans: Structured repayment plans that may convince creditors to stop garnishment

Special Garnishment Protections in Colorado

Protected Income Sources

Colorado and federal law exempt certain income sources from garnishment:

• Social Security benefits (protected under 42 U.S.C. § 407)

• Veterans’ benefits

• Disability insurance payments

• Unemployment compensation (Colorado Employment Security Act)

• Child support received

• Retirement benefits (with limitations)

• Workers’ compensation benefits

• Colorado Works Program assistance

• Aid to the Blind, Aged, or Disabled

Colorado-Specific Exemptions

Colorado offers some unique protections:

• 75% Exemption: At minimum, 75% of your disposable earnings are protected from most garnishments

• Health Insurance Proceeds: Generally exempt from garnishment under C.R.S. § 13-54-102

• Wildcard Exemption: Colorado allows a $6,500 “wildcard” exemption that can be applied to any property

• Tools of Trade: Up to $30,000 for items needed in your occupation

Exceptions for Certain Types of Debt

Some debts have different garnishment rules in Colorado:

• Child Support: Can garnish up to 65% of disposable earnings

• Tax Debts: IRS and Colorado Department of Revenue can garnish without a court judgment

• Student Loans: Federal loans can be garnished administratively (without court order)

Step-by-Step Process to Stop Garnishment

1. Assess your situation: Determine what type of debt is being garnished and review your legal options

2. Gather documentation: Collect pay stubs, tax returns, household expense information, and garnishment notices

3. Consult with an attorney: Many Colorado legal aid organizations offer free initial consultations for garnishment cases

4. File appropriate paperwork: Submit exemption claims or motions promptly, observing all deadlines

5. Attend required hearings: Be prepared to explain your financial hardship and justify your request

6. Follow through: If you obtain relief, ensure you meet all conditions to prevent the garnishment from resuming

Colorado Wage Garnishment Resources

• Colorado Judicial Branch Self-Help Center: Official state court system resource with forms, instructions, and procedural information for garnishment cases.

• Colorado Department of Labor and Employment: State agency providing information on wage laws, employee rights, and garnishment regulations.

• U.S. Bankruptcy Court – District of Colorado: Official bankruptcy court resources, forms, and filing procedures for Colorado residents.

• Colorado Attorney General’s Consumer Protection Division: State resource for reporting unfair debt collection practices and consumer protection issues.

• Colorado Department of Law – Consumer Credit Unit: Regulates debt collectors and provides information on debt collection practices.

• Colorado Secretary of State: Official source for business entity information and legal forms.

Preventing Future Garnishments

• Create and follow a realistic budget using the envelope method or 50/30/20 rule

• Work with creditors before accounts become delinquent through hardship programs

• Consider credit counseling services approved by the National Foundation for Credit Counseling

• Build an emergency fund to avoid future financial crises (aim for 3-6 months of expenses)

• Monitor your credit report regularly for early warning signs through annualcreditreport.com

• Consider debt consolidation for high-interest debts before they lead to judgments

When to Seek Legal Help

Consider consulting an attorney if:

• You believe the garnishment is improper or calculated incorrectly

• You need to file for bankruptcy with the U.S. Bankruptcy Court for the District of Colorado

• The garnishment creates severe hardship

• You’re unsure which exemptions apply to your situation

• You need to navigate complex Colorado garnishment laws

Many legal aid organizations in Colorado offer free or low-cost assistance for wage garnishment issues, including Colorado Legal Services and Metro Volunteer Lawyers.

Conclusion

Wage garnishment can create significant financial strain, but Colorado residents have multiple legal options to stop or reduce garnishments. Acting quickly is essential, as most remedies have strict deadlines.

By understanding your rights under Colorado garnishment law and taking prompt action, you can protect more of your income while working toward a long-term solution to your debt issues. Whether through exemptions, bankruptcy, or negotiation, there are legitimate ways to stop wage garnishment and regain financial stability in Colorado.