Debt: Wage Garnishing at the Federal Level

Owing money is no joke, as anyone who has had his or her wages garnished can tell you. What is wage garnishment? If one of your creditors obtains a judgment against you, they have several ways in which they can legally collect money from you, including:

  • seizing your assets
  • your bank accounts
  • portion of your wages

That’s where wage garnishing comes in. If your wages are garnished to fulfill your debt obligation, your employer will be contacted and presented with a writ of garnishment, which allows a portion of your wages to be taken out and given directly to your creditor.

The good news (if there can be said to be any in this scenario) is that there are federal laws that limit the amount that can be withheld from your paycheck and protect you from excessive wage garnishing.

For example: Under current federal law, three-quarters of your disposable earnings are legally exempt from garnishment – you may keep 75%, or thirty times the federal minimum hourly wage. That means that no more than 25% of your check is subject to garnishment, or the amount over thirty times the minimum wage prescribed by Title 29, whichever is less. It also protects you from being fired or discharged because your earnings are being garnished.

Federal law also defines what “disposable earnings” are, and puts a cap on the amount that can be garnished for individuals who are responsible for child or spousal support. So even if your wages are garnished, you can take comfort in knowing that you are protected by federal law and can still meet your obligations for child support and spousal support. However, these laws only apply to judgments for standard credit accounts, such as revolving credit cards and bank loans. If you are being pursued for federal student loans, child support, or alimony, the federal exemptions on wage garnishing will not apply.