Judgment creditors—those who've filed a lawsuit against you and won—and creditors with a statutory right to collect back taxes, child support, and student loans can garnish or "take" money directly out of your paycheck. But they can't take it all. Federal and state law limits the amount a creditor can garnish.
To learn how wage garnishments work, see Wage Garnishments: An Overview.
If a judgment creditor is garnishing your wages, federal law provides that it can take no more than:
Your disposable income is established by subtracting required deductions from your total paycheck. Required deductions include things like federal and state taxes, state unemployment insurance taxes, Social Security, and required retirement deductions. They do not include voluntary deductions, such as health and life insurance, charitable donations, savings plans, and more.
The current federal minimum hourly wage is $7.25 per hour (as of July 2020). If you make $600 per week after required deductions, 25% of your disposable income is $150. The amount that your income exceeds 30 times $7.25 is $382.50 ($600 - 217.50). That means the most that can be garnished from your weekly paycheck is $150.
The U.S. Department of Education or anyone collecting on its behalf can garnish up to %15 of your disposable income to collect on defaulted student loans. These agencies do not have to sue you first and get a judgment in order to garnish, but they must provide you with notice of the garnishment ahead of time.
Since 1988, all new or modified child support orders include an automatic wage withholding order, even for child support that is not delinquent. The child support is withheld from your paycheck and your employer sends the money directly to the other parent. If you are required to maintain health insurance coverage for your child, the payment for that will be deducted from your paycheck as well. You can agree with the other parent to pay child support on your own, without resort to wage withholding.
Up to 50% of your disposable earnings can be garnished to pay child support if you are currently supporting a spouse or a child who isn't the subject of the order. If you aren't supporting a spouse or child, up to 60% of your earnings may be taken. An additional 5% can be taken if you are more than 12 weeks in arrears.
Taxing authorities have different limits for wage garnishment. The IRS bases the amount on how many dependents you have and your standard deduction amount. State taxing authorities have formulas, too. The IRS will send you a notice before it begins to garnish your check, but it does not have to get a judgment first.
States are free to offer more protection to debtors in wage garnishment actions than does the federal government; they cannot provide less. Many states follow the federal guidelines, but some protect more of a debtor's wages. For example, in Massachusetts, most judgment creditors can only garnish up to 15% of your wages.
To find the state wage garnishment rules in your state, visit the website of your state department of labor. Or check out Nolo's State Wage Garnishment page; it has articles on wage garnishment laws in each of the 50 states.
The head of household exemption is a state law that lets you protect more of your wages. It's available to judgment debtors who are the primary source of financial support for the family. However, not all states have a head of household exemption, and the exempt amounts of disposable income can range from 100% to 90%, or be the amount necessary for the care and support of your family.
Keep in mind that receiving the head of household exemption protection isn't automatic in most cases. In many states, you'll need to claim the exemption by filing paperwork with the court. You might also need to object to the garnishment. If you don't follow the procedures required by your state, the judgment creditor will likely get more of your wages than the creditor is entitled to receive by law.
As soon as you receive a wage garnishment notice or order, it's essential to find out what you need to do to protect your income—especially if you have family members who rely on you. The response time will likely be short, and possibly a matter of days.
Carefully reading any paperwork given to you is an excellent place to start. It might explain your options or even include the forms you'll need to respond to. If not, local courts often have instructions posted on a website. Or you can try calling the sheriff or constable responsible for serving collection actions or the court clerk. Many courts also provide self-help services a few times per week. If you can't find the information you need, consider consulting with a local attorney.
Learn how filing for Chapter 7 bankruptcy will stop a wage garnishment.