Archive for the ‘Consumer Credit Protection Act’ Category

These days with credit card and mortgage defaults on the rise, and the economy in the toilet , if some of you don’t pay attention to lawsuits being filed against you, you could wind up with the unpleasant surprise of you employer telling you that your paycheck is being garnished.  If a judgment has been entered against you and your paycheck is being garnished it may be too late to consult with an attorney to get the situation undone, but try anyway.  If that fails, you need to be aware of the federal laws governing wage garnishments.

A wage garnishment is a involuntary taking of monies owed by your employer to you, if you owe money to third parties such as a mortgage company, credit card company, the IRS, the state or perhaps you owe money for alimony or child support.

The Federal law that applies to these wage garnishments in Title III of the Consumer Credit Protection Act.    The law protects everyone receiving personal earnings, i.e., wages, salaries, commissions, bonuses, or other income—including earnings from a pension or retirement program. Tips are generally not considered earnings for the purposes of the wage garnishment law.

The amount of pay subject to garnishment is based on an employee’s “disposable earnings,” which is the amount left after legally required deductions are made. Examples of such deductions include federal, state, and local taxes, the employee’s share of State Unemployment Insurance and Social Security.

The law sets the maximum amount that may be garnished in any workweek or pay period, regardless of the number of garnishment orders received by the employer. For ordinary garnishments, the weekly amount may not exceed the lesser of two figures: 25 percent of the employee’s disposable earnings, or the amount by which an employee’s disposable earnings are greater than 30 times the federal minimum wage (currently $7.25 an hour).

There are exceptions to the rule for garnishment of amounts owed for taxes, child support and alimony.

Keep in mind that your employer is not allowed to fire you when one of these garnishments is received, although it is not clear whether the employer may fire you if you have continuous wage garnishments from third parties.

For great examples of how much can be garnished check out the U.S. Department of Labor’s Fact Sheet #30 at

Keep in mind also that each state might also have its own laws protecting you from wage garnishments. For instance, in Florida if you are a head of household and support your family with those wages, you are entitled to additional protections.