Defending Against Wage Garnishment
So a court judgment has been entered against you and the creditor is now attempting to garnish your wages. A bad situation may be about to get worse, and you need to know what your options are. You’re not alone. As of 2013, around 7% of employees in the United States have had their wages garnished at some point. Seven percent may not sound like a whole lot, but it amounts to around 11 million workers. These numbers also do not factor in members of our Armed Forces, who may still have their wages garnished, but are not included in Department of Labor statistics.
Fortunately, there are actions you can take to reduce or eliminate the garnishment if you meet certain requirements. Florida law generally follows federal wage garnishment laws, but also allows several exemptions that protect those caught in the unfortunate position of having their wages garnished.
So what is wage garnishment? Wage garnishment is a court order that requires your employer to withhold money from your paycheck and send it to your creditor. There are legal limits to the type of wages and the amounts that can be garnished. Federal law prohibits a creditor from taking more than 25% of your disposable wage and only if your wages are above a certain level. If you have multiple garnishments against you, the total amount that can be garnished is limited to 25%, not 25% per garnishment. Your disposable wage is whatever you are paid after your employer has made the legally required deductions. Child support, despite being a garnishment, is generally treated as a deduction for this calculation.
Deductions include required federal, state, and local taxes, social security and Medicare withholdings, and the employee portion of unemployment compensation insurance, but do not include any voluntary deductions such as insurance, union dues, or retirement contributions. In order to be garnished, your disposable income must also exceed 30 times the federal minimum wage. At current levels, this is any income over $217.50 per week. Disposable income over this amount can be garnished, but the garnishment cannot leave you taking home less than this amount every week.
Florida law also contains certain exemptions that may protect your wages even further. The most common exemption is the Head of Family exemption. In order to qualify as the Head of Family, you must contribute more than 50% of the support for a child or other dependent. For example, if you are married, and your spouse is not working and has no other income, you may qualify for this exemption. Other examples would be your contributions to either court ordered child support and/or alimony if you are divorced. In awarding child support, the court will calculate an amount that the child “needs.” Each parent will then be assigned a portion of this need based on their income. If the amount you are required to contribute is more than 50% of the total, you may also qualify as the Head of Family.
If you do qualify as Head of Family, there are two possible outcomes. If you earn $750 per week or less, then the creditor may not garnish your wages. If you earn more than $750 per week, then the creditor may be able to garnish your wages, but only if you consent to the garnishment in writing. This exemption is not automatic. You must claim the exemption within a certain time period after being notified that your wages are being garnished. The court will then hold a hearing, where you must provide proof that you qualify, and decide if the creditor can garnish your wages.
Certain types of income may not be garnished at all under Florida law. These wages include most government benefits, such as Social Security, SSI, Public Assistance, and Veteran’s benefits. Retirement and pension benefits, life insurance, disability, and Prepaid College Trust Fund or Medical Savings Accounts are also not subject to garnishment.
Certain types of garnishments have limits other than the standard 25%. Child support is capped at 50% of your disposable income if you are supporting a spouse or another child, or 60% if you are not. An additional 5% may be garnished if you are over 12 weeks late in making payments. These high limits on child support garnishment do not count towards the maximum 25% of your disposable wages that may otherwise be garnished, but the amount is deducted from your disposable wages, lower the amount the other garnishments are calculated at.
While the limit to the amount that can be garnished to pay child support is significantly higher than the limits for other debts, the amount of child support you pay affects your disposable income mentioned earlier and therefore the amount against which the 25% is calculated. Federal student loan debt is capped at 15% and unpaid taxes, which the federal government may garnish even without a court order, have limits which depend on how many dependents you have and your deduction rates.
So what does your employer need to do? After the order garnishing your wages is entered by the court, the creditor will send what is called a Writ of Garnishment to your employer, informing them. They will then have to respond within a certain amount of time (20 days in Florida) and provide information regarding your pay, deductions, and other garnishments. They will also enter the amount that they will be withholding from your check. If the employer fails to comply, then they themselves may be liable for at least part the debt.
Most importantly, if your wages are being garnished, you need to act. Ignoring the garnishment will not make it go away, and could even cause you to forego your rights, including the right to any exemptions you may be entitled to.