Overview

• Wage garnishment is governed by state law; however, a federal statute gives guidelines regarding the maximum amount creditors can collect via garnishment. States can set lower limits, but states can't set limits that exceed those given in the federal statutes. As such, creditors can only garnish up to 25 percent of someone's "disposable income." Disposable income is all that left over, after other compulsory items are deducted; compulsory deductions include federal and state tax levies, unemployment insurance deductions and Social Security deductions.
  
  

Procedure

• When a debtor has his wages garnished, it is only after his creditor has gone to court and been granted a writ of garnishment. Once this happens, the debtor's employer receives the writ and is then required to comply with it; the employee cannot stop garnishment without successfully challenging the writ in a court of law. The employer is responsible for deducting the calculated amount, and if the employer doesn't comply, the employer is on the hook, so to speak, for noncompliance. This is why the debtor/employee can be terminated for more that one garnishment; employers are liable for all garnishments, and more than one creates a greater risk for employers.
  
  

Garnishment

• Creditors usually only seek garnishment when the debtor has not responded to requests for payment. Garnishment is typically a last resort because it costs the creditor money to obtain a garnishment order. Depending on the state, only certain types of creditors can obtain garnishment orders; some states don't allow credit card companies to garnish an employee's paycheck. These states still allow garnishment for debts such as child support, taxes and non-federal student loans.
  
  

Exceptions

• Some states allow exceptions for employees who would otherwise experience financial hardship due to the garnishment. For example, Florida has an exception for debtor's who qualify as head of their household. It's important to know your state's laws to determine whether your can claim an exception. Regardless, as a debtor, you have the right to contact you creditor and ask if you can work out a payment arrangement. It's worth a try, even if you're attempting to pay less than what would otherwise be garnished from your paychecks. Lastly, creditors are usually open to payment plans that result in your debt being paid off earlier than if the creditor continued to garnish your wages.