If you've been sued in court by one of your creditors, such as a credit card company or a hospital where you have an outstanding debt, you may be wondering how much of your wages can be garnished. Perhaps you owe child support payments or spousal support or federal income taxes and fear that your wages will be garnished for those debts.
Garnishment laws differ from one state to another, but certain state and federal provisions tend to apply when determining when and how wages can be garnished.
Private Debt vs. Debt to the Government
It's important to understand that private debt you owe to a business, such as a credit card company or other private lender, is different from that owed to a governmental entity for purposes of paying child support or taxes. State laws that permit private creditors to collect debt by garnishing wages are far more restrictive than those governing wage garnishment for other types of debt.
A creditor cannot simply inform your employer that you have a past-due balance and order your employer to garnish your wages. The creditor must take you to court and get a civil judgment in its favor.
Federal Laws Restricting Garnishment
Federal laws are in place to prevent creditors from overextending their reach. Federal law exempts 75 percent of disposable weekly earnings from wage garnishment, or an amount that is equal to 30 times the federal minimum wage--whichever is greater.
This provision applies to all 50 states and cannot be superseded by state law. Most state laws conform to federal provisions, while other states permit a larger amount of disposable income to be exempt from wage garnishment.
Disposable income is calculated as the earnings received after federal income taxes, social security and unemployment insurance is taken out of your gross earnings.
These limits do not apply to garnishments for child support, alimony, taxes or federal student loans.
Do All States Allow Creditors to Garnish Wages?
Certain states, such as Texas, Florida, and Nevada, are known as "debtors' states" or "debtor-friendly states" because they do not permit an individual's wages to be garnished to pay a debt to a private creditor or they narrowly limit the options of creditors post-judgment.
For example, in Texas, wages can be garnished only if you owe child support. Similarly, in Pennsylvania, wages can be garnished only for child support and taxes. In North Carolina, a debtor must have substantial funds on deposit and not be supporting a family to have wages garnished, except when money is owed for child support, unpaid taxes and debt to a public hospital. The state of South Carolina prohibits wage attachment.
While some states prohibit wage garnishment to pay off a private debt, most states have laws in place that permit wages to be garnished for child support, taxes and federal student loans.
Process
In some states, a notice of garnishment is sent to the debtor and his employer concurrently. But some states, such as New York and Ohio, allow the debtor to be served with a notice that gives her a "grace period" in which to settle up with a creditor before her employer receives an order to garnish.
Some states permit wage attachments that allow a garnishment to remain in effect until the debt is paid in full, but others allow wage garnishment to expire after a certain number of days, weeks or pay periods. For example, in Oklahoma, a creditor can choose between a non-continuing wage attachment that lasts one pay period or a continuing attachment that is good for 180 days. In Wisconsin, a garnishment is effective for 13 weeks, after which time a new garnishment action must be commenced.
Most states do not permit more than one garnishment at a time--one judgment must be satisfied before the next garnishment is attached to your earnings. The exception to this general rule is if you owe child support or a federal debt. Under these circumstances, your wages can be garnished to pay both the creditor and the child support or federal debt.
Exceptions
In some states, individuals whose earnings place them below the federal poverty level are not subject to wage garnishment. The same exemption applies to those who receive state or federal assistance. Some states, such as North Dakota, reduce the amount of wages that can be garnished if a debtor has dependents. But in California, a community property state, not only can the wages of the debtor be garnished, but also those of his or her spouse.
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