Federal and state laws determine how much of your wages are subject to garnishment. Federal laws permit a judgment creditor to garnish 25 percent of your wages or the amount by which these earnings exceed 30 times the federal minimum wage, whichever is smaller. Although some state laws follow federal guidelines, others exempt a greater percentage of your wages from a garnishment order.
What is a Wage Exemption?
A wage garnishment order takes money from your disposable earnings. According to the definition of disposable earnings for garnishments, this is the amount leftover after subtracting payroll taxes, Social Security and unemployment insurance. It does not consider voluntary deductions for insurance or retirement savings. A wage exemption is a legal option for protecting some or all of your disposable earnings from a garnishment calculation. This is designed to leave you with enough income to pay for living expenses.
Types of Wages Exemptions
Head of Household
Although not all states offer it, head of household is the most common wage exemption. The idea is to make sure a person who provides more than 50 percent of the financial support for a legal dependent has the funds necessary to provide this support. State laws vary as to how much protection the exemption provides. For example, according to the Nolo law website, Florida exempts all of your disposable wages, Missouri exempts 90 percent and some states exempt whatever amount is necessary to care for your family.
Some state laws provide a full or a partial exemption if gross wages from all incoming earning family members fall below a certain amount. For example, Wisconsin laws exempt all wages if the debtor’s household income lies below the federal poverty level. In addition, wages of debtors who have either received or qualified to receive public assistance such as medical assistance or food stamps within the six months preceding a garnishment order also are fully exempt.
Filing an Exemption Claim
Wage garnishment exemptions are not automatic. If you do not follow the procedures outlined by your state, your employer will garnish the maximum allowable amount. Review the garnishment notice, as most states outline claim procedures in this document. Although state laws vary, the process usually starts by filing a head of household affidavit or a claim of exemption and a financial disclosure with the court that issued the garnishment order.
A court hearing in which you further explain your financial situation is a common next step. The judge will review your request and any supporting documentation, listen to your explanation and then rule on your request.