can you revoke a wage assignment

How to Legally Revoke a Wage Assignment

Unlike a wage garnishment, a wage assignment is a voluntary agreement between you and a creditor. When you agree to a wage assignment, you are agreeing to allow a certain dollar amount, or percentage, of your wages to be held back and paid to the creditor toward satisfaction of a debt. Since a wage assignment is voluntary, you may legally revoke the assignment at any time by notifying your employer of your intention to revoke.

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Locate a copy of the original wage assignment for reference. Wage assignments are typically part of a payday loan or title loan agreement.

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Draft a letter to your employer, or human resources department of your company, indicating that you wish to revoke the wage assignment.

Include in the letter the date of the original assignment, the assignment amount and to whom you assigned your wages. At the end of the letter, clearly state that you wish to "revoke the previous wage assignment referenced above" or similar language.

Make two copies of the letter. Mail or deliver the original to your employer and mail a copy to the creditor. Save the other copy for your records.

Although many creditors may imply that the wage assignment cannot be revoked, the small print at the bottom of the loan contract will generally state that it can, in fact, be revoked.

Revoking the wage assignment does not eliminate your legal obligation to repay the debt. The creditor may still proceed to attempt to collect on the debt by other means such as filing a lawsuit against you.

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What Is Wage Assignment?

Definition and example of wage assignment, how wage assignment works, wage assignment vs. wage garnishment.

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A wage assignment is when creditors can take money directly from an employee’s paycheck to repay a debt.

Key Takeaways

• A wage assignment happens when money is taken from your paycheck by a creditor to repay a debt.
• Unlike a wage garnishment, a wage assignment can take place without a court order, and you have the right to cancel it at any time.
• Creditors can only take a portion of your earnings. The laws in your state will dictate how much of your take-home pay your lender can take.

A wage assignment is a voluntary agreement to let a lender take a portion of your paycheck each month to repay a debt. This process allows lenders to take a portion of your wages without taking you to court first.

Borrowers may agree to allow a lender to use wage assignments, for example, when they take out payday loans . The wage assignment can begin without a court order, although the laws about how much they can take from your paycheck vary by state.

For example, in West Virginia, wage assignments are only valid for one year and must be renewed annually. Creditors can only deduct up to 25% of an employee’s take-home pay, and the remaining 75% is exempt, including for an employee’s final paycheck.

If you agree to a wage assignment, that means you voluntarily agree to have money taken out of your paycheck each month to repay a debt.

State laws govern how soon a wage assignment can take place and how much of your paycheck a lender can take. For example, in Illinois, you must be at least 40 days behind on your loan payments before your lender can start a wage assignment. Under Illinois law, your creditor can only take up to 15% of your paycheck. The wage assignment is valid for up to three years after you signed the agreement.

Your creditor typically will send a Notice of Intent to Assign Wages by certified mail to you and your employer. From there, the creditor will send a demand letter to your employer with the total amount that’s in default.

You have the right to stop a wage assignment at any time, and you aren’t required to provide a reason why. If you don’t want the deduction, you can send your employer and creditor a written notice that you want to stop the wage assignment. You will still owe the money, but your lender must use other methods to collect the funds.

Research the laws in your state to see what percentage of your income your lender can take and for how long the agreement is valid.

Wage assignment and wage garnishment are often used interchangeably, but they aren’t the same thing. The main difference between the two is that wage assignments are voluntary while wage garnishments are involuntary. Here are some key differences:

Once you agree to a wage assignment, your lender can automatically take money from your paycheck. No court order is required first, but since the wage assignment is voluntary, you have the right to cancel it at any point.

Wage garnishments are the results of court orders, no matter whether you agree to them or not. If you want to reverse a wage garnishment, you typically have to go through a legal process to reverse the court judgment.

You can also stop many wage garnishments by filing for bankruptcy. And creditors aren’t usually allowed to garnish income from Social Security, disability, child support , or alimony. Ultimately, the laws in your state will dictate how much of your income you’re able to keep under a wage garnishment.

Creditors can’t garnish all of the money in your paycheck. Federal law limits the amount that can be garnished to 25% of the debtor’s disposable income. State laws may further limit how much of your income lenders can seize.

Illinois Legal Aid Online. “ Understanding Wage Assignment .” Accessed Feb. 8, 2022.

West Virginia Division of Labor. “ Wage Assignments / Authorized Payroll Deductions .” Accessed Feb. 8, 2022.

U.S. Department of Labor. “ Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title III (CCPA) .” Accessed Feb. 8, 2022.

Sacramento County Public Law Library. “ Exemptions from Enforcement of Judgments in California .” Accessed Feb. 8, 2022.

District Court of Maryland. “ Wage Garnishment .” Accessed Feb. 8, 2022.

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What Is a Wage Assignment?

How wage assignment works.

• Why Are Wage Assignments Voluntary?

Wage Garnishment

The bottom line.

• Credit & Debt
• Debt Management

Wage Assignment: What It Means, How It Works

Wage assignment is the act of taking money directly from an employee's paycheck in order to pay back a debt obligation. Such an automatic withholding plan may be used to pay back a variety of debt obligations, including back taxes, defaulted student loan debt, and both child and spousal support payments.

Key Takeaways

• A wage assignment takes funds directly from an employee's paycheck to pay back a debt.
• How wage assignments are regulated varies by state, with some states even allowing for voluntary child support agreements.
• A wage garnishment is an involuntary deduction and requires a court order.

Wage assignments are typically incurred for debts that have gone unpaid for a prolonged period of time. Employees may sometimes opt for a voluntary wage assignment to pay for things like union dues or to contribute to a retirement fund.

A wage assignment is processed as part of an employer's payroll procedure. The employee's paycheck is decreased by the amount of the assignment and noted on their pay stub.

A wage assignment is often a lender's last resort to receive repayment from a borrower who has previously failed to pay a debt obligation.

Wage assignments are a valuable tool for collecting unpaid debts, but unfortunately, they may be associated with abusive lending practices . If you're struggling with your debt, one of the best debt relief companies or credit counseling agencies may be able to help you get back on track before a wage assignment is incurred.

What Makes Wage Assignments Voluntary?

In a voluntary wage assignment, a worker essentially asks their employer to withhold a portion of their paycheck and send it to a creditor to pay off a debt. Loan agreements may sometimes include a voluntary wage assignment clause in their terms should the borrower default on their loan.

Payday lenders often include voluntary wage assignments into their loan agreements to better their chances of being repaid. Laws regarding wage assignments vary by state.

For example, in West Virginia, wage assignments are capped at 25% of a worker's take-home earnings, the employee and the employer must sign the agreement, and agreements must be renewed annually. Under Illinois law, a lender cannot resort to wage assignment until a debt is 40 days in default. The wage assignment cannot continue for more than three years, and the worker can stop the wage assignment at any time.

Involuntary wage deductions, known as wage garnishments , require a court order and are most likely to be employed to collect spousal and child support payments that have been ordered by a court. Wage garnishments may also be used to collect unpaid court fines or student loans that have been defaulted on.

Several states allow individuals to sign up for voluntary child support agreements. In such a case, both parents must agree to a plan. Once that happens, a voluntary wage assignment may begin. If a child support or welfare agency is involved, they would have to approve any plan.

How Long Can I Have a Wage Assignment?

Since wage assignments are voluntary, the length of time that you use one can vary. Some loans include a wage assignment agreement, so you'll have to check the language of your loan to determine your obligation. Each state also has its own regulations regarding wage assignments.

How Much of My Income Can Go to Wage Assignments?

Every state has its own regulations, but typically 15–25% of your disposable income can be designated for wage assignments.

Is Wage Garnishment the Same as Wage Assignment?

While they are similar, wage garnishment and assignment are not the same. Wage garnishment is an involuntary paycheck deduction, typically ordered to repay child support, student loans, tax debt, or bankruptcy. A wage assignment is voluntary and may be used to repay a consumer debt.

Wage assignments may be a useful tool to help you pay down a debt. Wage assignments are voluntary but they may be hidden in the fine print of some loan products, so read everything carefully before signing. Check the regulations in your state to determine if your wage assignment is revocable.

West Virginia Division of Labor. " Wage Payment and Collection (WPC) Act: Payroll Deductions and Wage Assignments ," Page 3.

Illinois General Assembly. " (740 ILCS 170/) Illinois Wage Assignment Act ."

U.S. Department of Labor. " Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title III (CCPA) ."

Illinois Legal Aid. " Understanding Wage Assignment ."

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Wage assignment and employers’ responsibilities

Tough economic times raise some tricky HR issues—for example, when an employee’s financial straits begin to affect his employer.

Must we honor a payday loan wage assignment?

Q. An employee borrowed money from a payday loan service at a very high interest rate that I feel is unfair. The payday loan service sent me a “wage assignment” notice and told me that our company must withhold money from his paychecks.  What is a wage assignment, and does our company actually have to honor it? A. A wage assignment is a document that allows a creditor to attach part of the employee’s wages if the employee fails to pay a specific debt. The creditor does not have to obtain a judgment in a court proceeding before requesting payment. Under the Illinois Wage Assignment Act (740 ILCS 170), private employers are obligated to honor a creditor’s properly served demand for a valid wage assignment, unless an employee presents a timely, valid , written defense to the wage assignment.

What constitutes a valid assignment?

Q. How can I tell if a wage assignment is valid? How long is it valid? A. A valid wage assignment document must have the words “Wage Assignment” printed or written in boldface letters of not less than ¼ inch in height at the head of the wage assignment and one inch above or below the line where the employee signs the assignment. The employee must have signed the document in person, and the document must show the date of execution, the employee’s Social Security number, the name of the employer at the time of execution, the amount of money loaned or the price of the articles sold or other consideration given, the rate of interest or time-price differential to be paid, if any, and the date on which such payments are due. A wage assignment is valid for no more than three years after the employee signs it and the employer’s name appears on it. If the employee changes jobs, the wage assignment is valid for two years, even though the new employer’s name does not appear on the assignment.

Handling wage assignments

Q. How does the wage assignment process start? A. Assuming that the wage assignment document complies with the formal requirements, the creditor must serve “demand to withhold” on the employer. The demand is valid only if:

The employee has defaulted on the debt secured by the assignment for more than 40 days, and the default has continued to the date of the demand.

The demand contains a correct statement of the amount the employee is in default, and the creditor provides an original or a photocopy of the assignment to the employer.

The creditor has served a “notice of intention to make the demand” upon the employee, with a copy to the employer, by registered or certified mail not less than 20 days before serving the demand.

Putting on the brakes

Q. Can an employee stop the wage assignment process? A. The employee does have a right to contest the demand. If an employee has a legal defense to the wage assignment, the employee may—within 20 days after receiving a notice of demand or within five days after the employer is served with the demand—notify the employer, in writing, of any defense to the wage assignment and send a copy of the written defense to the creditor by registered or certified mail.   As a result, the employee’s wages are not subject to a demand served by the creditor unless the employer receives a copy of a subsequent written agreement between the creditor and the employee authorizing such payments. Similarly, if the creditor receives a copy of the defense prior to serving its demand upon the employer, the creditor may not serve the demand upon the employer.  Whether the employee’s defense is legally valid is not an issue the employer must resolve. Instead, the employee and the creditor may attempt to reach another agreement or the creditor may simply bring a separate lawsuit against the employee to collect an outstanding debt. 

Calculating the wage assignment payment

Q. How much must the employer withhold—and when? A. The employer must begin payment to the creditor no sooner than five business days after service of such a demand.  The employer must withhold the lesser of:

15% of weekly gross wages

The amount by which the disposable earnings for a week (pay remaining after federal and state taxes, Social Security deductions and any other amounts required by law to be withheld, including required retirement contributions) exceed 45 times the federal minimum wage, unless a notice of defense is received within that five-day period.

The employer shall be paid a fee of $12 for each wage assignment. That $12 is credited against the debt.

WHAT TO READ NEXT

Voluntary Wage Assignments and Why You Should Avoid Them At All Costs

You would never hand over your paycheck to a creditor, would you?  Of course if you were under threat or order by a court you may hand over your paycheck; but never voluntarily. Right? Well, surprisingly many debtors do just that when they agree to “voluntary wage assignments.” A voluntary wage assignment is an agreement between a creditor and debtor that says the lender can deduct a certain amount of money from the debtor’s paycheck to repay a loan.

Voluntary wage assignments are commonly used by payday lenders. Surprised? You shouldn’t be.  Payday lenders understand that the reason debtors use their “services” is because they are financially strapped and desperate for cash.  But because their interest rates and fees are astronomically high, most debtors experience “payment shock” and may try to avoid paying them when the bill is due. So to protect their interests in the loan, payday lenders are now using voluntary wage assignments to increase their chances of getting paid.

How Voluntary Wage Assignment  Works

A voluntary wage assignment works just like a wage garnishment , except that the debtor has agreed to it. If a debtor defaults on the payday loan, the lender can then garnish the debtor’s wages without going to court. Once a debtor defaults on their payday loan, the lender will send the debtor a notice informing them that they plan to implement the voluntary wage assignment (i.e. wage garnishment).  This usually happens 20 days before the wage assignment notice is sent to the employer.   A wage assignment is valid for up to 3 years . In other words, the payday lender could technically garnish your wages for 3 years or until the loan is repaid.

For obvious reasons, agreeing to a wage assignment isn’t smart. You give the payday lender access to your wages and make it easier for them when you are not legally required to do so.  Signing a voluntary wage assignment can place you and your family in dire straits, if the lender garnishes wages that you need for your mortgage/rent, food and medical care. If you have signed a voluntary wage garnishment, you can revoke the agreement by sending the lender a letter.  Remember, Payday Loans are Dischargeable in Bankruptcy

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Wage Garnishment & Assignment: 4 must knows for employers

By Julie Farraj

Feb. 15, 2017

Proper management of wage garnishment can be especially crucial to growing businesses because as their hiring increases, they may also be inadvertently increasing their garnishment liability. That’s why it’s important for an employer to remember four things can help appropriately and accurately process wage garnishments while remaining compliant.

1. All garnishments are not the same.

Here’s a basic wage withholding definition: When an employee fails to repay a debt, a wage withholding court order can be issued against the employee’s earnings to satisfy that debt. This court order — also called a wage garnishment — requires the employer to withhold a portion of the employee’s wages and forward them to a third party. Wage garnishment orders also can be issued by government agencies such as the IRS, state tax agencies and the U.S. Department of Education.

Simple, right? A business receives an order about one of its employees and refers it to its payroll department to process by withholding the appropriate wages and forwarding it to the proper recipient.

There are six common types of wage garnishment. They are:

Child support garnishment comprises by far the highest volume of orders employers process, and, while some of the laws are very standardized, the law can vary by state.

Creditor garnishments are debts that occur when a person is delinquent on consumer payments (e.g. credit card debt). The creditor may take the debtor to court and seek a wage withholding order for the outstanding debt.

Bankruptcy orders . Based on research from the American Bankruptcy Institute , 97 percent of all bankruptcies are personal filings rather than business filings.

Student loans may be collected by the U.S. Department of Education, which may contract with collection agencies to enforce and collect the defaulted loans.

Tax levy garnishments can be issued at the federal, state or local level. Each state differs in its requirements and those laws may differ from federal levies.

Wage assignment occurs when an employee voluntarily agrees to have money withheld from his or her wages. Wage assignments are governed by state law and do not involve a court order. Since they are voluntary and the employee specifies the amount to withhold, they do not fall under the requirements of the Federal Consumer Credit Protection Act.

It’s important that employers keep in mind the type of debt owed, the party collecting it, and the laws applicable to that debt. Knowing which laws, rules, and regulations apply and keeping current on them when processing wage garnishments can be challenging for employers, and, if done incorrectly, may expose employers to various liabilities and penalties.

In addition, the six types of wage garnishments noted above are the most common wage garnishments; employers may receive other less common types of wage garnishments. It’s the employer’s responsibility to comply with and make sure all orders are processed in a timely manner and correctly whether or not they are familiar.

2. Wage garnishment can affect employee productivity and morale.

Most employers recognize that wage garnishment has a direct impact on employees. However, this impact can extend beyond their paychecks. Processing garnishments is not as straightforward as simply withholding wages from an employee’s paycheck and sending a payment. The process is far from simple and can be complicated by myriad emotions.

Employees often find it humiliating because the courts have intervened and employers have become involved in their private struggles.

Employees in this position may feel that they’re now working for the institutions to which they’re indebted rather than for themselves and their futures. Stress and anxiety are often natural extensions of the garnishment process.

An affected employee’s anxiety could show itself through decreased productivity or a lack of motivation. Employers can help affected employees and potentially decrease future garnishments by providing financial wellness training and counseling, as well as tax education, to help employees manage debt.

3. Wage garnishment can affect an employer’s finances and business efficiency.

Employees aren’t the only ones affected by wage garnishment. Employers expose themselves to financial and legal risk when they incorrectly garnish an employee’s wages, fail to file in a timely way, file a defective response, fail to follow specific requirements when sending payments, or make other missteps with a garnishment. Mishandling a garnishment can lead to a judgment against the employer for the entire amount of the employee’s debt, a lawsuit from the creditor or the employee, or other costs or penalties that the employer didn’t anticipate or budget for.

In the instance of garnishments for child support, employers could potentially feel the impact of laws designed to restrict travel. For instance, the Social Security Act was amended in 1997 with a sub-section that established the denial, revocation, or restriction of U.S. passports if the non-custodial parent has child support arrears of $2,500 or more. Additionally, some state agencies have the authority to deny or revoke drivers’ and professional licenses for past-due child support obligations .

If your business requires employees to travel internationally or employs drivers, these laws could impact an employee’s ability to do his or her job effectively and, by extension, impact the efficiency of your business.

Another current area of focus that could impact employers is in the creditor garnishment arena. Currently, the American Payroll Association is working with the Uniform Law Commission to establish a standardized processing for creditor garnishments through the Uniform Wage Garnishment Act, which proposes to standardize the wage-garnishment process for employers, employees and creditors. Currently, state laws differ significantly in their requirements regarding wage garnishment, from the beginning to the end of the garnishment, and are often outdated. This means businesses that operate in multiple states must identify and abide by these different legal requirements, which can potentially lead to processing errors, confusion, inefficiency and noncompliance.

Companies can help manage these challenges if they become familiar with garnishment laws and guidance from agencies such as the Federal Office of Child Support Enforcement, develop reliable and timely procedures for garnishment processing and ensure that policies are administered fairly for all employees facing a wage garnishment.

It may be useful to develop tools, resources and strong contacts with agencies, courts and garnishors. Staying close to these agencies may help your business remain aware of major changes to wage garnishment laws.

Consider participating in state and federally initiated pilot projects. These programs are valuable opportunities to positively build relationships, influence initiatives and provide needed feedback. Make sure you have established a way to monitor legislation that could affect garnishment processing.

Other steps an employer can take include participating with committees, attending conferences regarding wage withholding, and leveraging other contacts you’ve developed with the agencies, those imposing wage garnishments, or other employers.

4. Paper processing is the not the only option.

A study by the ADP Research Institute revealed that 7.2 percent of employees had wages garnished in 2013. Keeping pace with the proper and timely processing of wage garnishments is challenging for many businesses.

As wage garnishment volumes and laws intensify, garnishment processors have the option to use electronic funds transfer, or EFT, to save time, increase efficiency, streamline processes and potentially reduce costs.

Currently, virtually every child support state agency has the ability to accept child support payments via EFT, and some have even mandated employers to send payments electronically. Some tax levy agencies, trustees and student loan agencies also are implementing electronic payment capabilities. In addition to business efficiencies, EFT enables greater security of personally identifiable information, such as Social Security numbers.

Minnesota has passed legislation requiring employers to electronically file their response to a state tax garnishment summons with the state tax agency, and Wayne County Court in Michigan is piloting the option of electronic responses.

Electronic income withholding orders are already very popular. These enable states to electronically distribute income withholding orders and employers to electronically accept or reject them.

Clearly, wage garnishment can have a profound effect on the employee who is being garnished, as well as the employer who must implement the garnishment. It’s important for businesses of all sizes to understand the different types of wage garnishment, familiarize themselves with the laws governing them, and learn ways to accurately and efficiently process them.

Using best practices can help streamline an employer’s responsibilities and ease the potential anxiety an employee may feel with this sometimes-necessary workforce issue.

Julie Farraj is vice president of Garnishment Services for ADP Added Value Services. Comment below or email [email protected].

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Words at Ease

15 Sample Letters to Revoke Wage Assignment

Wage assignments can be a double-edged sword – while they may have helped you secure a loan or manage debt in the past, they can also become a significant burden on your financial well-being.

If you find yourself in a situation where a wage assignment is no longer necessary or is causing undue hardship, it’s essential to know how to effectively revoke it.

Sample Letters to Revoke Wage Assignment

However, the process of revoking a wage assignment can be confusing and overwhelming, especially if you’re not sure where to start or what to say. That’s where this comprehensive guide comes in.

We’ve compiled 15 sample letters that will help you navigate the revocation process with confidence and clarity, ensuring that you can take back control of your hard-earned income and move forward with peace of mind.

Letter 1: Revocation Due to Debt Satisfaction

Subject: Revocation of Wage Assignment – Debt Satisfaction

Dear [Employer/Creditor],

I am writing to inform you that I have successfully paid off the debt associated with the wage assignment currently in place. Per my agreement with [Creditor Name], I have made all the necessary payments, and the debt has been satisfied in full.

Please consider this letter as a formal request to revoke the wage assignment, effective immediately. I kindly ask that you cease any further deductions from my paycheck and provide me with written confirmation of the revocation.

Thank you for your assistance in this matter. If you require any additional information or documentation, please do not hesitate to contact me.

Sincerely, 

[Your Name]

Letter 2: Revocation Due to Financial Hardship

Subject: Revocation of Wage Assignment – Financial Hardship

I am writing to request the revocation of the current wage assignment due to financial hardship. My circumstances have changed significantly since the initial implementation of the wage assignment, and the deductions are now causing an undue burden on my ability to meet basic living expenses.

I kindly ask that you revoke the wage assignment, effective immediately, and work with me to establish an alternative payment plan that takes into account my current financial situation. I am willing to provide documentation of my hardship, if necessary.

Please provide me with written confirmation of the revocation and any steps I need to take to facilitate this process. Thank you for your understanding and cooperation.

Letter 3: Revocation Due to Employer Change

Subject: Revocation of Wage Assignment – Employer Change

Dear [Previous Employer],

I am writing to inform you that I am no longer employed with your company. As such, I am requesting that you revoke the wage assignment that was in place during my employment.

Please process this revocation immediately and provide me with written confirmation for my records. If any outstanding deductions need to be addressed, please contact me promptly to discuss the matter.

Thank you for your attention to this request. If you require any additional information, please do not hesitate to reach out.

Letter 4: Revocation Due to Creditor Error

Subject: Revocation of Wage Assignment – Creditor Error

I am writing to request the immediate revocation of the wage assignment currently in place, as I believe there has been an error on the part of the creditor. Upon reviewing my records, I have discovered that the debt associated with this wage assignment has already been paid in full.

I have attached documentation supporting this claim, including payment receipts and correspondence with the creditor. In light of this information, I kindly ask that you revoke the wage assignment and refund any deductions made in error.

Please provide me with written confirmation of the revocation and refund process. If you require any additional information or clarification, please contact me promptly.

Letter 5: Revocation Due to Bankruptcy

Subject: Revocation of Wage Assignment – Bankruptcy

I am writing to inform you that I have recently filed for bankruptcy. As a result, all wage assignments and garnishments must be immediately revoked, as per federal bankruptcy law.

Please consider this letter as a formal request to revoke the wage assignment currently in place. I have attached a copy of my bankruptcy filing for your records.

Kindly provide me with written confirmation of the revocation and cease any further deductions from my paycheck. If you have any questions or require additional information, please contact my bankruptcy attorney, [Attorney Name], at [Attorney Contact Information].

Letter 6: Revocation Due to Incorrect Deduction Amount

Subject: Revocation of Wage Assignment – Incorrect Deduction Amount

I am writing to request the immediate revocation of the wage assignment currently in place, as I believe the deduction amount is incorrect. According to my records and the original agreement with the creditor, the deduction should be [Correct Amount] per pay period, not the [Incorrect Amount] that is currently being withheld.

I have attached documentation supporting this claim, including the original wage assignment agreement and my payment records. Please revoke the current wage assignment and implement a new one with the correct deduction amount.

Kindly provide me with written confirmation of the revocation and the implementation of the corrected wage assignment. If you require any additional information or clarification, please contact me promptly.

Letter 7: Revocation Due to Unauthorized Deductions

Subject: Revocation of Wage Assignment – Unauthorized Deductions

Dear [Employer],

I am writing to express my concern and request the immediate revocation of the wage assignment currently in place. Upon reviewing my pay stubs, I have discovered that deductions are being made without my authorization or knowledge.

I have not agreed to any wage assignment and have not received proper notification of such an arrangement. As a result, I am demanding that you cease these unauthorized deductions immediately and refund any amounts withheld to date.

Please provide me with written confirmation of the revocation and refund process, along with an explanation of how these unauthorized deductions occurred. If you require any additional information or clarification, please contact me promptly.

Letter 8: Revocation Due to Completion of Payment Plan

Subject: Revocation of Wage Assignment – Completion of Payment Plan

I am writing to inform you that I have completed the payment plan associated with the wage assignment currently in place. Per my agreement with [Creditor Name], I have made all the necessary payments, and the debt has been satisfied in full.

Letter 9: Revocation Due to Statute of Limitations

Subject: Revocation of Wage Assignment – Statute of Limitations

I am writing to request the immediate revocation of the wage assignment currently in place, as I believe the debt associated with this arrangement is beyond the statute of limitations for collection in [Your State].

According to my records, the last payment made towards this debt was on [Date], which is more than [Number of Years] years ago. Per [Your State]’s statute of limitations, this debt is no longer legally collectible.

Please consider this letter as a formal request to revoke the wage assignment and cease any further deductions from my paycheck. I kindly ask that you provide me with written confirmation of the revocation.

If you require any additional information or clarification, please contact me promptly.

Letter 10: Revocation Due to Disputed Debt

Subject: Revocation of Wage Assignment – Disputed Debt

I am writing to request the immediate revocation of the wage assignment currently in place, as I am disputing the validity of the debt associated with this arrangement.

After reviewing my records and communicating with the creditor, I have reason to believe that the debt is inaccurate, and I am formally challenging its validity. As a result, I am requesting that you cease any further deductions from my paycheck until the dispute is resolved.

Please provide me with written confirmation of the revocation and direct any further correspondence regarding this debt to me in writing. If you require any additional information or clarification, please contact me promptly.

Letter 11: Revocation Due to Termination of Employment

Subject: Revocation of Wage Assignment – Termination of Employment

I am writing to inform you that my employment with your company has been terminated, effective [Date]. As a result, I am requesting that you revoke the wage assignment that was in place during my employment.

Please process this revocation immediately and provide me with written confirmation for my records. If there are any outstanding deductions or final payments that need to be addressed, please contact me promptly to discuss the matter.

Letter 12: Revocation Due to Reduction in Hours

Subject: Revocation of Wage Assignment – Reduction in Hours

I am writing to request a revision of the current wage assignment due to a recent reduction in my work hours. As a result of this change, the current deduction amount is causing significant financial strain and is no longer feasible given my reduced income.

I kindly ask that you revoke the existing wage assignment and work with me to establish a new arrangement that takes into account my current financial situation. I am willing to provide documentation of my reduced hours and income, if necessary.

Sincerely, [Your Name]

Letter 13: Revocation Due to Garnishment Limits

Subject: Revocation of Wage Assignment – Garnishment Limits

I am writing to request an immediate adjustment to the wage assignment currently in place, as I believe the deduction amount exceeds the legal garnishment limits in [Your State].

According to [Your State]’s laws, the maximum amount that can be deducted from an employee’s disposable earnings is [Percentage] or [Dollar Amount], whichever is less. The current deduction of [Current Amount] appears to violate these limits.

Please revoke the existing wage assignment and implement a new one that complies with the legal garnishment limits. I kindly ask that you provide me with written confirmation of the adjustment and refund any excess amounts that have been withheld.

Letter 14: Revocation Due to Identity Theft

Subject: Revocation of Wage Assignment – Identity Theft

I am writing to request the immediate revocation of the wage assignment currently in place, as I believe I am a victim of identity theft, and the debt associated with this arrangement is fraudulent.

Upon reviewing my credit report and communicating with the creditor, I have discovered that the debt in question is not mine and was likely opened using my personal information without my knowledge or consent.

Please consider this letter as a formal request to revoke the wage assignment and cease any further deductions from my paycheck. I have attached a copy of the police report and identity theft affidavit for your records.

Kindly provide me with written confirmation of the revocation and direct any further correspondence regarding this fraudulent debt to me in writing. If you require any additional information or clarification, please contact me promptly.

Letter 15: Revocation Due to Change in State Law

Subject: Revocation of Wage Assignment – Change in State Law

I am writing to request the immediate revocation of the wage assignment currently in place, as I believe it is no longer valid due to a recent change in [Your State]’s wage assignment laws.

Per the updated legislation, wage assignments must now meet specific criteria and be subject to new limitations and requirements. The current wage assignment appears to be non-compliant with these new regulations.

Please consider this letter as a formal request to revoke the wage assignment and cease any further deductions from my paycheck. I kindly ask that you review the updated state laws and provide me with written confirmation of the revocation.

In conclusion, revoking a wage assignment can be a complex and intimidating process, but with the right approach and communication, you can successfully take control of your finances and protect your hard-earned income. By using these 15 sample letters as a guide, you can effectively navigate the revocation process and ensure that your rights and interests are protected. Remember to tailor each letter to your specific circumstances, maintain a professional and assertive tone, and keep thorough records of all correspondence. With persistence and determination, you can break free from the burden of wage assignments and take a significant step towards financial freedom and peace of mind.

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Money & debt.

Worried about doing this on your own?  You may be able to get free legal help.

This program will help you prepare your documents. It will ask you questions and you will enter your answers. At the end of the program, you will get a completed set of letters with instructions that you can save and print.

Form completion time: 5 minutes to 10 minutes

You will be able to save your work in the middle of the program.

The interview and forms are in English.

Can I use this program?

To use this program, you must be trying to stop a person or creditor from taking money out of your paycheck based on a wage assignment agreement. This program cannot be used for wage garnishment.

Learn more about stopping a wage assignment  and the difference between wage assignment and wage garnishment .

What do I need first?

To complete this program, you will need to know:

• Your account number, another account reference listed on your bill, or a way to clearly identify yourself to the creditor,
• Your creditor's name and address, and
• Your employer's name and address.

What documents will this create?

This program prepares the following documents:

• Instructions
• Revocation Notice
• Employer Notice

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How Can I Stop a “Voluntary Wage Assignment”?

Home » Debt Help Resources » How Can I Stop a “Voluntary Wage Assignment”?

Posted in Creditor Actions

By J. Douglas Hoyes, CA, LIT

Reading time: 3 minutes

Some lenders require their borrowers to sign a form called a “Voluntary Wage Assignment” which allows the borrower’s wages to be garnisheed if they do not repay the loan as agreed.  Payday loan companies and Credit Unions commonly ask borrowers to sign these types of forms. However not all wage assignment agreements are enforceable by law.

A voluntary wage assignment is an agreement between a debtor and a creditor which allows an amount to be deducted from the borrower’s wages to repay a debt. When a loan is in default, a signed wage assignment form is sent to the borrower’s employer requesting the company begin withholding an agreed amount from their wages and remit this amount to the creditor.

I am often asked if it is possible to stop a voluntary wage assignment without declaring personal bankruptcy. Here are the facts:

• In order to garnishee your wages in Ontario, a creditor must take you to court and sue you, and then obtain a Garnishment Order from the court.
• The only exceptions are a Credit Union to whom you have given an assignment of wages, or Canada Revenue Agency.
• In Ontario, Section 7 of the Ontario Wages Act specifically prohibits the assignment of wages to secure payment of a debt except in the case of a Credit Union.
• If any other creditor has not taken you to court, and has not obtained a Garnishment Order, the only way that the voluntary wage assignment can be enforced is if you consent to the employer garnisheeing your wages.

What that means is that only a Credit Union is legally able to enforce a wage assignment agreement in Ontario.  You can ‘un’-volunteer yourself from a voluntary wage assignment with a payday loan company or any creditor other than a Credit Union .

While generally, you can ask your employer to stop a voluntary wage assignment, the wage assignment may be a symptom of a greater financial problem and if you have received a legal garnishment order, there are options to stop a wage garnishment .

Can payday loan companies garnish your wages?

Payday loan companies often ask you to sign a voluntary wage assignment as part of the loan process. However these voluntary assignments are unenforceable.  Even though you have signed the voluntary wage assignment form, the form is not legally binding in Ontario; you can instruct your employer to not enforce it, and your employer is required to do as you ask.

Payday loan companies can, however, still go to court if they wish and obtain a legal garnishment order. If they, or any creditor, has obtained a court order granting them permission to garnish your wages, then your employer is required to comply.

If you are having problems meeting your financial obligations, please contact us to arrange a no charge consultation with one of our professionals to talk about your debt relief options.

Similar Posts:

• Wage Garnishing: Know Your Rights
• Stopping A Wage Garnishment with a Consumer Proposal
• How do I Stop a Wage Garnishment by Making a Deal with My Creditor?
• How to Stop a CRA Wage Garnishment
• What to Do When Creditors Threaten Legal Action

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