Understanding Wage Garnishment Limits
Wage garnishment is a legal procedure that allows creditors to collect debts by withholding a portion of an individual’s wages. Federal and state laws impose limits on the amount of income that can be garnished to protect debtors from financial hardship.
Federal Wage Garnishment Limits
The Consumer Credit Protection Act (CCPA) sets the following limits on wage garnishments for non-support debts:
- General Limit: The lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage.
- Disposable Earnings: Earnings after deducting required deductions such as taxes, Social Security, and court-ordered child support.
Example:
If the federal minimum wage is $7.25 per hour and an individual earns $600 weekly after required deductions, the maximum garnishment amount is $150 (25% of $600).
Wage Garnishment Limits for Child Support and Alimony
For child support or alimony, the CCPA allows for higher garnishment limits:
- Current Support: Up to 50% of disposable earnings if supporting another spouse or child.
- Delinquent Support: Up to 60% of disposable earnings if not supporting another spouse or child.
- Additional 5%: For support payments more than 12 weeks in arrears.
Exceptions to Wage Garnishment Limits
The CCPA’s garnishment limits do not apply to:
- Bankruptcy court orders
- Federal or state tax debts
- Debts owed to federal agencies
State Wage Garnishment Limits
States may impose stricter garnishment limits than the federal government. It is important to check your state’s laws for specific regulations.
Protecting Your Income from Garnishment
If you are facing wage garnishment, you may have options to protect your income:
- Head of Household Exemption: Some states offer exemptions for individuals who are the primary financial support for their families.
- Objecting to Garnishment: You may be able to object to a garnishment if it exceeds legal limits or if you have financial hardship.
- Bankruptcy: Filing for bankruptcy can stop wage garnishment.
Additional Resources:
Explained: The Maximum Amount That Can Be Garnished From Your Paycheck | Nicholas Gebelt – CA
FAQ
What is 30 times federal minimum wage?
What is the maximum amount the IRS can garnish from your paycheck?
What money Cannot be garnished?
How much money can be garnished?
If disposable earnings are more than $217.50 but less than $290 ($7.25 × 40), the amount above $217.50 can be garnished. If disposable earnings are $290 or more, a maximum of 25% can be garnished. When pay periods cover more than one week, multiples of the weekly restrictions must be used to calculate the maximum amounts that may be garnished.
What percentage of disposable earnings can be garnished?
In Example 2, 25% of disposable earnings ($490.00) is $122.50, and disposable earnings ($490.00) minus 30 times the minimum wage of 7.25 per hour (217.50) is $272.50. Since $122.50 is less than $272.50 the most that can be garnished from this individual’s income is $122.50.
What is a wage garnishment percentage?
For example, if you can argue your case in front of a court, they may reduce your wage garnishment percentage to 10% of your disposable earnings instead of 25%. Wage garnishments can also apply to other sources of income, such as bonuses, overtime pay and holiday pay.
What is the wage garnishment limit?
No matter how much you owe or how long you have avoided paying your bills, there are limits on wage garnishment. According to the Department of Labor, the federal limit is 25% of an employee’s disposable earnings or the employee’s disposable earnings minus 30 times the federal minimum wage, which is $7.25 in 2023.