Revoke Wage Assignment Letter
A wage assignment is a voluntary payroll deduction you agreed to when you took out a loan, often a payday or installment loan. It lets the lender take money straight from your paycheck. Under federal law, most wage assignments are revocable at any time. You revoke one by sending a written revocation letter to your creditor, and it helps to send a copy to your employer's payroll department too.
This page explains your rights, shows you the difference between a wage assignment and a wage garnishment, and gives you two free sample letters you can use today.
What is a wage assignment
A wage assignment is a clause you signed in a loan agreement that gives the lender permission to collect payments directly from your paycheck. It is voluntary. You agreed to it when you signed the loan.
Because it is voluntary, you can usually take that permission back. That is what a revocation letter does.
Wage assignment vs wage garnishment
People mix these up, and lenders sometimes count on that confusion. They are not the same thing.
| Feature | Wage assignment | Wage garnishment |
|---|---|---|
| How it starts | You sign a clause agreeing to it | A court orders it after a lawsuit |
| Is it voluntary | Yes | No |
| Can you cancel it | Yes, in most cases, in writing | No, not without fighting the judgment |
| Court involved | No | Yes |
| Common source | Payday and installment loans | A debt the creditor sued you over and won |
If your wages are being taken because of a court judgment, that is garnishment, and this letter will not stop it. If you agreed to payroll deductions in a loan contract, that is an assignment, and you can revoke it.
Can you revoke a wage assignment on a payday loan
In most cases, yes. The Federal Trade Commission's Credit Practices Rule says a lender generally cannot take a wage assignment in a consumer loan unless the assignment is revocable at your will. See 16 CFR 444.2(a)(3).
There are narrow exceptions, such as a payroll deduction plan you set up at the time of the loan, or an assignment that applies only to wages you already earned. Outside those exceptions, you have the right to revoke.
Revoking stops the payroll deductions. It does not erase the debt. The lender can still ask you to pay, and if you stop paying, the lender can sue you and try to collect other ways.
How to revoke a wage assignment
Follow these steps in order.
- Write a revocation letter to your creditor. State clearly that you are revoking the wage assignment. Include your name and account number.
- Send it by certified mail with return receipt requested. This gives you proof of the date the creditor received it.
- Send a copy to your employer's payroll department so they can stop the deduction.
- Keep copies of everything, including the certified mail receipt.
Sample letter to revoke a wage assignment (to your creditor)
Fill in the fields below, then download or print your letter.
Sample letter to your employer (payroll department)
[Your Address]
[City, State, ZIP]
[Date]
[Employer / Payroll Department]
[Address]
[City, State, ZIP]
Re: Stop Wage Assignment Deduction, [Your Name], Employee ID [if any]
Dear Payroll Department,
I have revoked a wage assignment tied to a loan with [Creditor Name]. A copy of my revocation letter to the creditor is attached.
Please stop any payroll deduction related to this wage assignment. If you need anything from me to process this, please let me know.
Sincerely,
[Your Signature]
[Your Printed Name]
How to revoke a wage assignment in Illinois
Illinois has its own rules on top of federal law, under the Illinois Wage Assignment Act, 740 ILCS 170. A few things are specific to Illinois.
- You can revoke the wage assignment at any time by sending written notice to the creditor. Illinois provides a sample Revocation Notice Form, but any clear written notice works.
- Your letter should include your name, the account number, and a statement that you are revoking the wage assignment.
Give a copy to your employer so payroll can stop any pending deduction. You can revoke before deductions start or after they have already begun.
What happens after you revoke
Revoking a wage assignment stops the payroll deduction. It does not cancel what you owe.
After you revoke, the debt is still active. The lender can keep trying to collect, can report the account, and can file a lawsuit. If the lender sues and wins, the court can order garnishment, which is different from the assignment you just revoked.
If you are dealing with payday or installment loan debt you cannot keep up with, revoking the assignment is a first step, not a full solution. It can help to look at whether debt settlement or consolidation makes sense for your situation.
Struggling with payday or installment loan debt?
Oak View Law Group can review your situation in a free consultation and explain your options through debt settlement or consolidation.
FAQ
A: Yes, wage assignments are legal, but federal law limits them. Under the FTC Credit Practices Rule, a lender generally cannot use a wage assignment in a consumer loan unless you can revoke it at any time.
A: No. Revoking stops the payroll deduction. You still owe the balance, and the lender can try other ways to collect.
A: Send it to your creditor by certified mail with return receipt requested, and give a copy to your employer's payroll department. Keep the receipt as proof of the date.
A: Through a wage assignment you signed, yes, until you revoke it. Without an assignment or a court judgment, a lender generally cannot take your wages.
A: A wage assignment is voluntary and revocable. A garnishment is court-ordered after a lawsuit and cannot simply be canceled by letter.
Sources
- Federal Trade Commission, Credit Practices Rule, 16 CFR 444.2
- Federal Trade Commission, business and consumer guidance on the Credit Practices Rule (ftc.gov)
- Illinois Wage Assignment Act, 740 ILCS 170
Updated on: August 03, 2026