Types of Garnishments in Order of Priority

by Sharon R. Barstow
Banks, businesses and individuals must request a court order for a wage garnishment.

It is up to the employer to understand how to handle the different levels of priority within wage garnishments. In general, priority is a function of both the type of garnishment and the reason for the garnishment. Wages for higher priority garnishments should be withheld before wage garnishments with a lower priority garnishment. While most priority designations are at the state level, in general, support orders get priority over a nonsupport orders, and a current support order gets priority over one in arrearage.

Percentage of Wages

There are three primary types of garnishments: support, federal debt and state debt. Each type has different priorities measured by the percentage of the allowable garnishment to total wages or net disposable income. It is important to note that there is a difference between disposable earnings and gross earnings. Disposable earnings deduct certain costs of living such as rent; gross earnings do not. Support allows as much as 60 percent of your total gross earnings to be garnished. Federal debt, or the IRS, allows up to 10 percent of your disposable net income, which is considerably lower. State debt garnishments are similar to federal.

Wage Garnishment

In addition to reasons for garnishment, there are also different types of garnishment that contribute to priority. Wage garnishment is the most common form. A lawsuit must be filed in court for a wage garnishment request, unless it is filed by the IRS, in which case, the garnishment does not need a court order. If you do not show up for court, the judge will usually rule in favor of the entity filing the lawsuit, and your employer is then obligated to pay those funds directly to the collector.

Attachments and Disposable Income

An attachment of earnings is similar to a wage garnishment, but attachments are more comprehensive. An attachment is applicable to wages, commission and any other income, including gains from the sale of property. Regular wage garnishments are based primarily on disposable earnings. The calculation of disposable income is specific to the order. Wages that are already in garnishment are not considered allowable deductions for calculating disposable income.

Consumer Credit Protection Act

Under the Consumer Credit Protection Act, the maximum percentage of disposable earnings -- not gross earnings -- that can be deducted to satisfy a creditor garnishment is 25 percent. Due to different priority levels among garnishment types, there are times when a garnishment with a lower priority will only be enforceable against a portion of disposable income or against no income at all. For example, if disposable income is $2,000 and child support is $600 -- child support is based on gross earnings -- the amount of child support is more than 25 percent of disposable income. Child support is considered a high priority which trumps other garnishments so no other garnishments other than child support can be taken against disposable income.

About the Author

Sharon Barstow started her career in investment banking and then crossed over to the world of corporate finance as a financial analyst. She specializes in banking and corporate finance topics to include treasury management, financial analysis, financial statement analysis, corporate finance and FP&A. In addition to writing, she is the co-owner of a small dog bakery in rural Ohio.

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