by: Kathleen Michon, J.D.
Judgment creditors can garnish your wages in order to collect the judgment. Creditors of a few types of debts (back taxes, child support, and student loans) can garnish your paycheck without a judgment. However, federal and state law limits the amount that can be garnished from your income. The amount varies depending on the type of creditor.
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 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 may 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% may be taken if you are more than 12 weeks in arrears.
Taxing authorities have their own limits for wage garnishment. The IRS bases the amount on how many dependents you have and your standard deduction amount. State taxing authorities may have their own formulas. The IRS will send you a notice before it begins garnishing, 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 sates 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.