The U.S. Department of Labor defines wage garnishment as “a legal procedure in which a person’s earnings are required by court order to be withheld by an employer for the payment of a debt such as child support.”

If you are facing wage garnishment, this blog will help you understand in what situations your wages can be garnished, the method employers use to calculate wage garnishment, and how to stop the process.

Wage garnishment permits a creditor to take payment directly from your paycheck when you owe them. Creditors are allowed to begin the process of wage garnishment for repayment for debts, including;

  • alimony or child support
  • back taxes
  • a student loan
  • a money judgment against you for some other unpaid bill like a credit card balance or personal loan

Before the creditor is allowed to do this, they typically are required to sue you first. Through this process, they can obtain a money judgment and receive a court order.

However, there are exceptions to this situation.

When a Creditor Can Begin Wage Garnishment

Wage garnishment is also known as wage attachment. It is a court order that requires your employer to withhold a specific amount from your paycheck and remit it to your creditor. The amount that a creditor is allowed to garnish depends on the type of debt in question, as well as federal and state government limits.

Generally speaking, any creditor is allowed to garnish your wages. But some creditors must meet more requirements before doing so.

For most debt types, the creditor can’t merely begin garnishing your wages if you don’t pay your bill. The creditor must first sue you in court, acquire a judgment, and obtain a court order.

How Much Can Be Garnished from your Paycheck?

If a creditor succeeds in obtaining a court order, the law limits the amount that they can take. Federally, this limit is defined as the lower of two scenarios: either 25% of disposable income or the amount your weekly disposable income exceeds 30 times the federal minimum wage.

However, your state may impose even stricter limits. In Florida, if your disposable income is less than 30 times the federal minimum wage, your wages cannot be garnished at all.

Not all creditors are required to sue before garnishing wages. The following categories of debt have special rules that assist creditors in expediting the collection process.

Child Support and Alimony

All child support orders automatically include a wage withholding order. If you’re ordered to pay child support, wages can be garnished without additional court action.

Limits for child support and alimony are much higher than for credit card or loan debts. Regarding child support, federal law permits garnishment of up to 50% of your disposable earnings. If you don’t have another spouse or child to support, this amount can climb to 60%. This amount may be further increased by 5% if you fall behind three months or more on your payments.

Back Income Taxes

If you owe back taxes to the IRS, the federal government may garnish your wages without having to go to court. The allowable amount depends on the number of dependents and personal deduction amounts. State and local governments are also allowed to collect unpaid taxes in this way, but they must follow state laws, which may vary.

Student Loans

If you have been missing your federal student loan payments, the U.S. Department of Education may garnish your wages without a court order. This is known as an administrative garnishment and is limited to 15% of your disposable income or the amount by which your weekly disposable wages exceed 30 times the federal minimum wage, whichever is less.

Bankruptcy Can Stop Wage Garnishment

It isn’t easy to make it financially when your wages are being garnished and you are taking less money home. If you find yourself in this situation and need assistance, call the offices of Richard V. Ellis, Sarasota bankruptcy attorney. We will discuss your options, including filing a claim of exemption or eliminating the debt through bankruptcy.