How is it that collection agencies can garnish bank accounts and paychecks, leaving 20% of income?

First, all states limit the amount of garnishment. While it does vary by state, the most common amount is to limit the total of ALL garnishments to no more than 25% of disposable wages--with the exception that for child support (and, I think, alimony), taxes, and student loans, the garnishment can be pushed higher, though still to no more than around 50, maybe 60%, of disposable wages. If your friend is being garnished more than this, something is being done wrong--maybe, for example, the court in later garnishments was not made aware of already-existing ones, so they did not take those earlier ones into account when setting the later garnishments.

Your friend should try contacting legal services or legal aid if she can't afford an attorney--they may be able to help her. If the garnishments are not child support, aliminy, taxes, etc., the most she should be garnished is around 20% total.