Check Garnishment Laws

Federal Laws and State Laws

• Title III of the federal Consumer Credit Protection Act exempts 75 percent of a debtor's disposable earnings from wage garnishment by a creditor. Alternately, if a debtor makes less than 30 times the federal minimum wage, weekly, his wages cannot be garnished. Title III also prohibits employers from firing an employee who has an initial garnishment placed on his earnings; however, the employee's job is not protected should the same employer receive an order for subsequent garnishments.
  
  All 50 states can allow creditors to use wage garnishment as a method of collecting post-judgment debt, but this is not a mandate. In fact, certain states, such as Texas and Pennsylvania, have strong debtors' rights and prohibit private creditors from garnishing wages. All states that allow creditors to use wage garnishment as a means of recovering legal debt must make sure that state law conforms with federal law, and the majority of states have some sort of wage garnishment laws in place (see Resources). Under no circumstance can a creditor garnish wages in excess of the amount permitted by Title III.
  
  

The Garnishment Order

• After a creditor sues the debtor in court and receives a judgment against the debtor, the creditor then gets an order from the court to garnish the debtor's wages. This is delivered to the debtor's employer, who acknowledges the order and sends a signed copy back to the court along with the amount of the debtor's earnings that are subject to garnishment.
  
  Each state has a different procedure in place with respect to garnishment orders. Some states, such as New York, require creditors to give debtors a 30-day grace period before the garnishment order is served to the employer, to give the debtor one last chance to settle, while other states make no such requirements.
  
  Garnishment orders are either continuous--in effect until the debt is paid in full--or noncontinuous, in which case the creditor must seek a new order from the court after a certain number of days, weeks or months, if the debt is not paid. Again, state law dictates whether a garnishment is continuous or noncontinuous and spells out additional procedural requirements with respect to garnishment orders.
  
  

Who Else Can Garnish Wages?

• The legal application of the term "garnishment" is to private creditors, such as credit card companies, hospitals and health care providers, and other holders of unsecured debt. However, a person's wages can be garnished for other reasons than the payment of unsecured debt. If a person is in arrears in child support payments, his earnings can be garnished. The federal government can garnish wages and even Social Security benefits for unpaid income taxes and certain federal loans, such as student loans. These governmental entities are not bound by the same rules as private creditors, who cannot garnish more than 25 percent of a debtor's disposable earnings.
  
  For example, Title III authorizes up to 50 percent of a person's earnings to be garnished for child support payments, if the person is already supporting a family, and up to 60 percent if he or she is not. If support payments are more than 12 weeks in arrears, the amount that can be garnished is 65 percent.
  
  The Internal Revenue Service can issue a levy (garnishment) against a tax debtor's wages if income tax goes unpaid. The percentage of the garnishment can range between 30 and 70 percent, depending on the filing status of the debtor (single, married) and the number of his dependents.