Wage Garnishment

Calculating the exact amount available for garnishment requires a forensic analysis of what constitutes disposable earnings. This figure is not your gross pay; it is the amount remaining after all legally mandated deductions, such as federal, state and local taxes, Social Security and unemployment insurance, have been subtracted. Voluntary deductions like 401k contributions, health insurance premiums and union dues are generally not excluded from the calculation. This means the percentage taken by the creditor is based on a larger pool of money than your actual take-home pay, often resulting in a much higher financial impact than the 25 percent figure suggests.

When state and federal laws conflict, the law that results in the smallest garnishment must be followed. Some states, such as North Carolina, Pennsylvania and Texas, provide significant barriers to the garnishment of wages for ordinary consumer debts, effectively shielding the worker’s income from most private creditors. In contrast, other states follow the federal 25 percent rule strictly. If you reside in a state with high protections but work for an employer based in a state with low protections, a complex jurisdictional battle over the applicable law often ensues. We utilize these conflicts of law to aggressively challenge out-of-state creditors who attempt to bypass your local protections.

While federal law prohibits an employer from firing an employee for a single wage garnishment, this protection often vanishes if you are hit with multiple orders from different creditors. The administrative burden of processing these payments, responding to court inquiries and managing payroll changes creates a significant cost for the company. This administrative friction often leads to informal workplace discrimination, passed-over promotions and strained professional relationships. Strategic legal intervention is required to manage the communication with your employer’s legal department to minimize the impact on your career trajectory.

Many states allow employers to deduct a small administrative fee from your remaining wages to cover the costs of processing the garnishment. While these fees are usually capped at a few dollars per pay period, they represent an additional financial drain on top of the principal, interest and attorney fees being collected by the creditor. In some cases, the employer may also seek reimbursement for legal fees if they are forced to defend their payroll actions in court. These hidden costs exacerbate the financial crisis, making it even more difficult to negotiate a settlement or file for bankruptcy.

In states like Florida, the head of household exemption is a powerful tool that can completely block a wage garnishment for individuals who provide more than half of the support for a dependent. This exemption applies even if the individual earns a high income, provided they meet the specific statutory criteria. However, asserting this right requires the filing of a formal affidavit and potentially an evidentiary hearing to prove the dependency status. Creditors frequently challenge these claims by auditing the debtor’s tax returns and household expenses, necessitating a rigorous forensic defense to maintain the exemption.

If the standard 25 percent garnishment leaves you unable to pay for basic necessities such as rent, food or medicine, you may be able to petition the court for a reduction of the order based on financial hardship. This requires the submission of a detailed financial statement and proof of all household income and expenses. The court has the discretion to lower the garnishment percentage to a more sustainable level, but this relief is often temporary and subject to periodic review. We utilize these hardship hearings to force creditors into settlement negotiations, as they would often prefer a guaranteed monthly payment over a reduced court order.

Child support and alimony are the most aggressive forms of garnishment, often allowing for the seizure of up to 50 percent or 60 percent of disposable earnings depending on whether the individual is supporting another spouse or child. Tax liens from the Internal Revenue Service also carry significant weight and can bypass many of the protections afforded to private creditors. When these high-priority orders are in place, they effectively shield the remaining income from credit card companies and medical providers, as the total amount garnished cannot exceed specific aggregate limits.

For ordinary consumer debts, the general rule is first in time, first in right. The first creditor to serve a valid writ of garnishment on your employer gets the full 25 percent, while any subsequent creditors must wait in line until the first judgment is paid in full. This creates a race to the courthouse among collectors. We monitor these filings to ensure that the priority of payments is handled correctly and to identify opportunities where a smaller, earlier garnishment can be used to block a larger, more aggressive creditor from accessing your payroll.

A garnishment is only as valid as the judgment it is based upon. In many cases, the original judgment was obtained through a default because the debtor never knew they were being sued. We aggressively move to vacate these old judgments by proving a lack of jurisdiction or improper service in the original lawsuit. If the underlying judgment is set aside, the wage garnishment must be terminated immediately and the creditor may be ordered to return all funds seized under the void order.

Every step of the garnishment process is governed by strict timelines. The creditor must file the correct forms, pay the required fees and serve the employer within a specific window. Any clerical error in the name of the employer, the social security number of the debtor or the amount of the judgment can be grounds for a motion to quash the writ. We conduct a microscopic review of all court filings to identify these technical defects, providing our clients with a tactical advantage to halt the seizure while we negotiate a more favorable outcome.

While Chapter 7 provides a total discharge of most debts, Chapter 13 allows for a structured repayment plan over three to five years. This is often the best strategy for individuals with high-priority debts like back taxes or child support that cannot be discharged. By moving from a hostile wage garnishment to a court-approved repayment plan, you regain control over your budget and stop the aggressive interest and penalties that creditors add to your balance every month.t and penalties that creditors add to your balance every month.

Under Section 547 of the Bankruptcy Code, a trustee or a debtor can avoid and recover transfers of property made to a creditor shortly before the bankruptcy filing. If a creditor garnished more than 600 dollars from your wages in the 90 days before you filed for bankruptcy, those funds may be clawed back from the creditor and returned to you or used to pay other debts in the estate. This serves as a powerful deterrent against aggressive collection tactics in the months leading up to a financial restructuring.