If you ever become a judgment debtor, meaning that a creditor has sued and won a money judgment against you for an unpaid debt, your wages may be subject to garnishment. Although the rules differ according to whether an assignment order refers to child support or ordinary debt, such as consumer and federal non-tax debt, federal and state wage assignment laws prevent multiple judgment creditors from garnishing your entire paycheck.
Wage Assignment Limits
Federal laws and most state laws limit the total amount of a wage assignment to 25 percent of your weekly disposable -- post-payroll tax -- earnings or the amount by which your wages exceed 30 times the current federal minimum wage, whichever is smaller. The 25 percent rule applies to all types of ordinary debt no matter how many assignment orders your employer receives. For example, if your weekly disposable income is $900, the most that multiple creditors can garnish in total is 25 percent, or $150. However, the 25 percent rule does not apply to child or spousal support garnishments, which can run as high as 50 percent to 65 percent of your disposable income.
Ordinary Debt Priority Order
Garnishment rules for ordinary debt say the first one received takes priority. According to the 25 percent rule, the only scenario in which your paycheck may show than one wage assignment is with federal non-tax debt or a federal student loan, for which the maximum garnishments are 15 percent and 10 percent, respectively. For example, if the Department of Education is already taking 10 percent of your income to repay a defaulted student loan and your employer receives another order from a credit card judgment creditor, an additional 15 percent of your income still is available. However, if the credit card company is already taking the full 25 percent, nothing else can be withheld until the first judgment is satisfied.
Priority Assignments Involving Child Support
In a multiple wage garnishment situation, child and spousal support orders always come before ordinary debt. Because these orders can consumer up to 65 percent of your disposable income, it’s unlikely that additional wage assignment orders ever will take effect. In addition, if your employer receives a child support order and your paycheck is already being garnished for one or more ordinary debts, those orders will stop and the child support order will take over.
Judgment Debtor Job Protections
The federal Consumer Credit Protection Act says that an employer can’t terminate you over a single wage assignment order. Although federal laws do not protect you from termination if your employer receives multiple garnishments from separate judgment creditors, laws is some states, such as the Illinois Wage Assignment Act do protect your job under those conditions.
- U.S. Department of Labor Wage and Hour Division: Fact Sheet #30: The Federal Wage Garnishment Law, Consumer Credit Protection Act's Title 3 (CCPA)
- Virginia Department of Labor and Industry: Multiple Garnishment
- Funkhouser Vegosen Liebman & Dunn LTD: Wage Garnishments and Wage Assignments: What Employers Need To Know
- AndreyPopov/iStock/Getty Images