Am I Allowed a Reasonable Living in Wage Garnishment?
Federal wage garnishment laws define specific guidelines for the amount of wages that may be taken from your weekly income. Whether or not this residual amount allows for a reasonable living depends on your total wages, the type of garnishment and on your lifestyle. The CCPA Title III---Consumer Protection Act---protects other types of income from garnishment including bonuses, commissions, pensions and retirement.
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Definitions
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Garnishment is the legal process of deducting or seizing a portion of a person's income as payment for debt. Wage garnishment amounts are based on disposable income as calculated by federal garnishment laws. Debts that may result in wage garnishment include judgments, taxes and child or spousal support. A portion of the disposable wages each week is subject to garnishment. In garnishment terms, disposable income is not the amount of money you have left after paying bills and purchasing necessities. It is the amount of wages left after specific deductions have been made.
Wage Deductions
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To determine the amount of weekly disposable earnings that are available for garnishment, deductions that are legally required are subtracted from the gross income. These deductions include federal, state and local taxes, payments for state unemployment insurance and social security contributions. Deductions that are not legally required, such as health insurance or union dues, are not factored into the disposable earnings equation. In order to enjoy a reasonable living after deductions and garnishment, you have the option to disallow deductions that are not legally required.
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Maximum Garnishment
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The maximum amount of disposable income that may be garnished in any pay period varies based on the type of garnishment issued. Child and spousal support payments can take up to 50 percent of the disposable wages each pay period. Other creditor related garnishments, such as from a civil judgment, can only take up to 25 percent of the disposable wages or any amount that exceeds 30 times the current federal minimum wage. The number of garnishment orders does not factor into the deductions; the maximum garnishment can go to pay one garnishment order or more than one.
Exemptions/Protections
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CCPA Title III does not apply to debts related to bankruptcy court orders, federal or state taxes. A person who is subject to these types of garnishments in addition to other garnishments may not have wages left for a reasonable living. CCPA does protect employees from being fired by employers based on having one wage garnishment, but does not prevent them from being fired if more than one wage garnishment is imposed. Persons who have income from government pensions, veteran's benefits, unemployment compensation, Social Security income and child support payments have a better chance at a reasonable living as garnishment does not apply to these types of income.
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