Indiana Garnishment Exemptions: Wage and Property Limits

Indiana garnishment exemptions are the categories of income and property that creditors cannot take from you, even after they win a judgment. Some protections come from federal law (Social Security, veterans’ disability, a portion of every paycheck). Others come from Indiana Code 34-55-10-2, which shields up to $15,000 of home equity, retirement accounts, health and education savings, earned income tax credit refunds, and limited amounts of other property. Most of these protections are not automatic. If a creditor freezes your bank account or garnishes your wages, you generally have to file a claim with the court to keep the protected funds.

How Much of Your Paycheck Is Protected

For ordinary consumer debts, Indiana caps wage garnishment at the lesser of 25% of your disposable earnings for the week, or the amount by which those earnings exceed 30 times the federal minimum wage. With the federal minimum still at $7.25 an hour, that second figure is $217.50 per week. If your disposable earnings for the week are $217.50 or less, none of the paycheck can be garnished.¹

Disposable earnings are what’s left after legally required deductions like taxes and Social Security withholding. Voluntary deductions (health insurance premiums, 401(k) contributions) do not come out first, so the garnishable amount is calculated on a number higher than your direct deposit.¹

Any continuing lien a court places on your income through proceedings supplemental is subject to this same cap.²

Income That Cannot Be Garnished at All

Federal law fully protects Social Security benefits from ordinary creditors. That covers retirement, disability, and survivor payments, and the protection follows the money into your bank account as long as its source can be traced.³

Two narrow exceptions apply to Social Security. The IRS can levy up to 15% of your monthly payment for unpaid federal taxes, and the U.S. Treasury can offset benefits to collect certain federal debts such as defaulted federal student loans.⁴

Federal service-connected veterans’ disability compensation is also fully protected under Indiana’s exemption statute, alongside Supplemental Security Income and certain disability pensions that a bank must specifically list in any account garnishment notice it sends you.⁵

Property Indiana Law Shields

Indiana Code 34-55-10-2 lists the property that state law protects from creditors. The dollar caps are modest, and Indiana opted out of the federal bankruptcy exemptions, so these same figures apply if you end up filing bankruptcy.

Homestead equity in your primary residence, up to $15,000. Spouses who own as tenants by the entireties can each claim this separately.
Other real estate or tangible personal property, up to $8,000.
Intangible property such as cash and deposit account balances, up to $300. Debts owed to you and income do not count toward this category.
Retirement accounts, including traditional and Roth IRAs, to the extent the contributions received tax-advantaged treatment.
Medical care savings accounts, health savings accounts, 529 college savings plans, and Coverdell education savings accounts.
Federal service-connected veterans’ disability compensation.
Federal and Indiana earned income tax credit refunds.
Professionally prescribed health aids for you or your dependents.

⁶

The $15,000 homestead cap is among the lowest in the country, which is worth knowing if you own a home with significant equity and are facing a judgment.

Where These Limits Do Not Apply

Two collection situations run on separate rules, and the ordinary exemptions do not fully protect you in either.

Child support and alimony withholding uses federal caps, not the 25% figure. A support order can reach 50% of your disposable earnings if you are supporting another spouse or child, 60% if you are not, and an additional 5% on top if you are more than 12 weeks behind. That means as much as 65% of a paycheck can be taken for support arrears.⁷ Child support withholding also has automatic priority over other garnishments, regardless of which order came first.¹

An IRS wage levy for unpaid federal taxes does not need a court judgment and does not use the 25% cap. Instead, the IRS leaves you a small weekly exempt amount based on filing status and dependents (about $82.30 for a single filer with one dependent paid weekly in 2026) and takes everything above that.⁸ If a levy is preventing you from paying for basic necessities, you can ask the IRS to release it based on economic hardship. You will need to submit financial documentation, and the debt itself does not go away; the IRS will usually set up a payment plan.⁹

How to Claim an Exemption

Most exemptions do not apply on their own. If a creditor freezes your account or garnishes your paycheck and you don’t act, protected money can be handed over anyway.

Bank account garnishments trigger a specific process. When a creditor reaches your account, the bank places a hold instead of immediately releasing the funds, and it must send you a notice that identifies the hold and lists the categories of protected funds (Social Security, SSI, veterans’ benefits, and certain disability pensions among them). If you file an exemption claim, the court must schedule a hearing generally within five business days. If you don’t request an early hearing, the hold stays until whatever date the court originally set, which can be weeks out.⁵

The practical steps look like this:

Figure out which funds or property qualify. For a bank account hold, that usually means identifying deposits that came from Social Security, veterans’ benefits, or another protected source. For a wage garnishment, it means checking whether the amount taken exceeds the statutory cap.
Gather documentation. Benefit award letters, bank statements showing the direct deposits from the paying agency, retirement account statements, and recent pay stubs all serve as the kind of proof courts expect.
File a written exemption claim with the court that issued the order. For bank holds, the notice from the bank should include the form. Send a copy to the creditor or the creditor’s attorney.
Show up to the hearing with your documentation. The court decides based on what you bring.

Speed matters. Money that leaves an account or paycheck before you claim the exemption is much harder to recover than money still on hold.

Asking a Court to Reduce a Garnishment

Indiana offers a protection federal law does not: if a 25% wage garnishment is causing real financial hardship, you can ask the court to lower it to as little as 10% of your disposable earnings. You have to show “good cause,” which in practice means proving that the standard deduction leaves you unable to cover essentials like rent, utilities, and food.¹

This provision is underused. Judges have genuine discretion, and a detailed monthly budget backed by bills, lease documents, and pay stubs is what turns a request into a reduction. If the standard garnishment is squeezing you, this is the tool to ask for.

1
Indiana General Assembly. Indiana Code 24-4.5-5-105 – Limitation on Garnishment and Proceedings Supplemental to Execution; Employer’s Fee
2
Justia. Indiana Code Title 34, Article 55, Chapter 8 – Proceedings Supplementary to Execution
3
Office of the Law Revision Counsel. 42 USC 407 – Assignment of Benefits
4
Social Security Administration. Can My Social Security Benefits Be Garnished or Levied?
5
Indiana General Assembly. Indiana Code 28-9-3-5 – Garnishment of Deposit Account
6
Indiana General Assembly. Indiana Code 34-55-10-2 – Debtor Exemptions
7
Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment
8
Internal Revenue Service. Tables for Figuring Amount Exempt From Levy on Wages, Salary, and Other Income
9
Internal Revenue Service. What if a Levy Is Causing a Hardship