How Much Can a Garnishment Take From Your Paycheck?
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Definition and Methods
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Wage garnishment is a process under which a creditor seizes a portion of a debtor's wages in order to satisfy an outstanding debt. Garnished wages are paid directly to the creditor by the debtor's employer (called the "garnishee"). Garnishment for consumer debts requires a monetary judgment against the debtor and a court order properly served upon the debtor's employer. Debts owed to federal agencies, such as unpaid taxes or student loans, may be recovered via "administrative garnishment," a type of debt collection that does not require a court order.
Federal Limits on Consumer Debt
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The federal government, through the Consumer Credit Protection Act (CCPA), has set limits on the amount that may be garnished from an employee's paycheck. For consumer debt, the federal limit is the lesser of the following: 1) 25 percent of disposable income (defined as gross income less taxes and other required withholding); or 2) any amount in excess of 30 times the federal minimum wage). Thus, an employee whose wages netted $500 per week would be subject to weekly garnishment of 25 percent ($125). An employee whose wages netted $300 per week would be subject to garnishment of $82.50, the amount that the employee's weekly wages exceed 30 times the federal minimum wage.
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Federal Limits on Other Debts
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The CCPA allows a higher percentage of employee pay to be garnished for non-consumer debts such child support, alimony, orders in bankruptcy and unpaid taxes. Garnishment for debts in these categories can range as high as 50 percent of the employee's net income after withholding.
State Limitations
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The CCPA sets the maximum permissible levels for wage garnishments, but it does not prohibit individual states from providing their citizens with additional protections. Some state laws do so by setting lower limits for the percentage of income that is subject to garnishment. Four states--North and South Carolina, Texas and Pennsylvania--prohibit wage garnishment for consumer debt altogether, although garnishment remains available for non-consumer debts such as child support.
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