Wage Garnishment in Indiana

Indiana: Federal Baseline with an ‘F’ NCLC Grade

Indiana follows the federal baseline CCPA limits under Ind. Code § 24-4.5-5-105, with no additional state-level wage garnishment protections. The National Consumer Law Center gave Indiana an ‘F’ grade in its 2024 “No Fresh Start” report, citing weak state-level wage and asset protections that leave workers vulnerable to aggressive debt collection.

The NCLC’s Assessment

The ‘F’ grade reflects a comprehensive review of Indiana’s debtor protections, including not just wage garnishment but also homestead exemptions, personal property exemptions, and bank account protections. Indiana’s $7.25 minimum wage and federal-default garnishment formula mean workers have the weakest possible legal shields against creditor collection actions.

Regional Context

Indiana is surrounded by a mix of protective and default states. Illinois offers one of the strongest garnishment formulas in the country (15% gross cap, 45× state minimum wage exemption). Michigan follows the federal baseline but has a higher minimum wage ($10.56). Ohio also follows the federal baseline but has a $10.70 minimum wage adjusted annually for inflation. Kentucky matches Indiana’s federal-baseline, $7.25-minimum-wage approach. Indiana workers are at a particular disadvantage compared to their Illinois neighbors — a worker in Illinois keeps dramatically more of their wages under garnishment.

Practical Implications

For an Indiana worker earning $600/week in disposable earnings facing a judgment creditor:

• Maximum garnishment: $150/week (25%)
• Amount protected: $450/week
• Annual loss at maximum garnishment: $7,800

Indiana’s $19,300 homestead exemption provides some asset protection, but for wage earners, the state offers no shield beyond the CCPA minimum. Workers in Indiana who qualify for exemptions or defenses should assert them promptly, as the state’s procedural framework provides limited automatic protections.

Statute: Ind. Code § 24-4.5-5-105; 15 U.S.C. § 1673 — Official source

This calculator is for consumer debt garnishment only. Not legal advice. Rules vary by debt type (student loans, child support, taxes). Verify with official sources before making any financial or legal decisions.