After a creditor has made numerous attempts to resolve a past-due balance on a loan, credit card or other debt, it may resort to filing a civil suit against you for the balance of your debt. Unless you can provide a valid defense to the lawsuit, such as proof that you previously paid off the debt, the creditor will likely win a judgment against you. This allows the creditor to garnish your wages. However, if you collect disability and work only part time, the creditor's garnishment options may be limited.
Garnishment of Disability
Although a creditor with a valid judgment may garnish most types of income, federal law prohibits judgment creditors from garnishing any part of your disability income. You will continue to receive 100 percent of your disability benefits as long as you are eligible for these benefits through your state. If a creditor attempts to garnish your disability income, contact an attorney -- he can help you work with the court to stop the disability garnishment.
Percentage Limitation
Federal law limits the amount of your wage earnings your creditor can garnish to 25 percent of your disposable income, which is the amount you earn after applicable taxes. Health insurance payments and retirement plan contributions do not reduce your disposable income. If you earn $900 per month in part-time income after taxes, the creditor can take only $225 of your earnings to apply toward your debt. Although all states must follow federal law, states are permitted to further percentage restrictions on wage garnishment.
Minimum Wage Limitation
Under federal law, garnishment is also restricted by minimum wage calculations. You may earn the equivalent of 30 times the federal minimum wage each week without garnishment. For example, if the federal minimum wage is currently $7.25, you can earn up to $217.50 per week without fear of garnishment. However, if you earn more than this amount, the 25 percent rule applies.
Considerations
Each state provides a statute of limitations for judgment wage garnishment. For example, Georgia only allows creditors to enforce a judgment through wage garnishment for seven years after the date of judgment. However, most states permit judgment creditors to apply to the court for judgment renewal. In Georgia, a renewal gives the creditor an additional seven years to collect from you. However, renewal is not automatic -- if the judgment creditor fails to apply for renewal, it typically cannot continue garnishing your wages after the statute of limitations has expired.
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