In Pennsylvania, as in all states, creditors who have successfully sued you in court can garnish your wages and bank accounts to get the money you owe. Sometimes referred to as a levy or lien, garnishments are not without limitations in the Keystone State.
How Garnishment Works
If you've been sued and the other party won, he has a variety of collection tools at his disposal. One of these is garnishment. Garnishment is a legal remedy that requires a third party, such as an employer or financial institution, to deduct funds from property that belongs to you, such as a bank account or your paycheck. Typically, the garnishment stays in effect until the debt has been collected in full.
In Pennsylvania, as in other states, wage garnishment is one of the most commonly used garnishment tools. Your creditor forwards a copy of the wage garnishment order approved by the court to your employer. The order discloses the creditor's right to payment from your paycheck and the amount to be deducted. Both federal and state law limit how much the creditor can deduct from each paycheck. Under federal law, up to 25 percent of your disposable income may be deducted or the amount of your disposable income above 30 times the federal minimum wage, whichever is less. Disposable income is money left over after legal obligations, such as taxes, Social Security and unemployment insurance, are deducted.
State Limitations on Wage Garnishment
Pennsylvania law takes a stricter stance on wage garnishment than federal law. Only 10 percent of your disposable income may be garnished, and that's only if the garnishment doesn't cause your income to drop below the poverty limit. If it does, the amount that can be deducted is further reduced. If all of your income falls under the poverty limit, your wages cannot be garnished at all. Additionally, state law only allows wage garnishment in limited cases, including for the collection of certain taxes, child support, divorce obligations, past-due rent, student loans and criminal restitution. This means that even if a creditor successfully sues you in court, he can't collect the debt using wage garnishment unless it falls into one of these categories.
Bank Account Garnishment
A bank account garnishment, also known as a bank account levy, seizes money you have in bank accounts at a financial institution. Unlike with wage garnishments, Pennsylvania doesn't limit the circumstances in which a creditor can use them. Winning a judgment against you in court usually is all that is necessary. If you lost your house to foreclosure, for example, the bank can garnish your bank accounts to recover the amount not satisfied by the foreclosure sale. However, certain types of funds are off-limits, such as Social Security benefits. If you can prove the funds in your bank account came from an off-limit source, the bank will not seize the funds.
Credit Card Companies
Since credit card debt does not fall into a permissible category for wage garnishments, card issuers can't use this method of collection in Pennsylvania. However, they can seize the money in your bank account, including wages you may have deposited into your account. If you share an account with your spouse, state law prohibits the creditor from seizing funds from the account unless it has a judgment against both of you. On the other hand, if you share an account with someone who is not your spouse, there is no such protection. The funds are once again up for grabs.