Garnishment of Your Wages
When there is a court judgment against you, the creditor has the right to “garnish” your wages. This means that the creditor can get a court order requiring your employer to deduct a portion of your wages from your paycheck and send it to the court to be applied to the judgment debt. With the exception of a student loan debt or a debt owed the government, garnishment can take place only after the creditor obtains a court judgment against you.
After obtaining a court judgment, the creditor must file a request for garnishment with the court clerk, sheriff, or another local official depending on state practice. A notice is then issued to the “garnishee” (your employer), directing it to turn over a portion of your paycheck at a specified time. You must be given notice of the garnishment and you can request a hearing to prove that state or federal law protects your money from garnishment. In some states, you have the right to ask the court to reduce the amount of the garnishment because of hardship or because you have recently received public assistance.
A portion of your wages is protected from seizure. Federal law protects most of your wages from garnishment, and, if your wages are very low, your paycheck is entirely protected. “Wages” that are protected include commissions, vacation pay, sick pay, disability benefit payments, and pension and retirement payments. The first $217.50 of weekly take-home pay cannot be garnished at all ($435 if you are paid every two weeks). This amount will go up if the current federal minimum wage of $7.25 per hour goes up.
If your take-home pay is between $217.50 and $290 a week, then only the amount over $217.50 can be garnished. If your take-home pay is more than $290 a week, then 25% of your wages can be garnished. For example, if your weekly take-home pay is $250, then $32.50 a week ($250 minus $217.50) can be garnished. If your take-home pay is $600 a week, $150 a week (25% of your pay) can be garnished. A higher amount can be garnished if the debt is for child support or alimony. If your wages are garnished, your employer will be given instructions about how to make these calculations. You do not have to do anything to trigger the protected amounts, but you may want to double-check your employer’s calculations.
Importantly, this is the federal limit on garnishment. State law may limit garnishment even more or even prohibit wage garnishment. However, neither the federal nor state limits on wage garnishment may apply once your paycheck has been deposited into your bank account.
Federal law also protects you from being fired because you are being garnished for a debt. This protection does not apply, however, if your wages are being garnished for more than one debt.
If you are an independent contractor. Some workers are classified by their employers as independent contractors. (Your employer is probably treating you as an independent contractor if it is not deducting your Social Security contribution from your pay check.) In theory, a creditor could get an order seizing all of the payments to you as an independent contractor to repay a judgment debt. However, this will be complicated for the creditor and many creditors won’t even try to do so. In addition, some states protect independent contractor payments the same as wages.