Can a wage garnishment be taken from severance pay?

MoneyWatch: Managing Your Money Can a wage garnishment be taken from severance pay? We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. .chip { background-image: url('/fly/bundles/cbsnewscore/images/chip-bgd/chip-bgd-moneywatch.jpg'); } By Angelica Leicht Angelica Leicht Senior Editor, Managing Your Money Angelica Leicht is the senior editor for the Managing Your Money section for CBSNews.com, where she writes and edits articles on a range of personal finance topics. Angelica previously held editing roles at The Simple Dollar, Interest, HousingWire and other financial publications. Read Full Bio Angelica Leicht June 8, 2026 / 11:02 AM EDT / CBS News Add CBS News on Google Severance is meant to carry you to your next opportunity, but is that money at risk if you have unpaid debt? Skaman306/Getty Images Many Americans are facing major financial challenges as we enter the second half of the year, and for good reason. Inflation not only remains elevated but is climbing, and borrowing costs are still high, too. Household debt also continues to climb, leaving some borrowers, particularly those with high-rate credit card debt, struggling to keep up with their monthly payments. The job market is also tough, and if you're one of the many who have experienced a job loss on top of those challenges, you know how quickly the financial pressure can escalate.In that situation, a severance package from your former employer can provide some important but temporary financial stability. Whether that payment is enough to cover a few weeks of expenses or several months of bills, the money from a severance is generally intended to help you bridge the gap between jobs and maintain some stability while you plan your next move. But when you have unpaid debts that are already in collections or have progressed to legal action, that financial cushion may not be as secure as it appears.And, if the creditor has already o...