Who Qualifies As Head of Household in Wage Garnishment?

Garnishment occurs after a creditor receives a legal judgment permitting collection of debt by automatic deduction from a debtor's paycheck. Every state has garnishment laws that govern the amount a creditor may garnish during a pay period. Although each state is free to establish its own garnishment laws, these laws cannot establish garnishment amounts in excess of that which is prescribed in Title III of the Consumer Credit Protection Act.

Limits

Pursuant to Title III, no creditor may garnish more than 25 percent of a debtor's disposable income. Disposable income is that which is leftover after compulsory deductions are made. For example, if a debtor nets $3,000 in a pay period, but has compulsory deductions of $500 for Social Security and taxes, the remaining $2,500 is considered disposable income. State and federal law allows creditors to garnish the lesser of 25 percent of a debtor's disposable income, or "the amount by which a debtor's disposable income exceeds 30 times the federal minimum hourly wage."

Head of Household

Head of household status is defined by the Internal Revenue Service. To qualify as head of household, a debtor must have been single at the end of the previous calendar year, must have paid more than half of household costs and must have had a "qualifying person" live with him for at least half the year. A qualifying person is a minor child or a dependent parent.

Exemption

Only Florida allows for a head of household exemption. In Florida, if a creditor obtains a garnishment judgment against a debtor who qualifies as head of household, that debtor can overcome the judgment. Other states have established garnishment limits below the federal guidelines. Thus, if head of household exemption is not available, the amount to which a creditor is legally entitled may still be below Title III's 25 percent limit.

Additional Considerations

Title III protects debtors from termination for a first garnishment. As such, it is illegal for an employer to fire an employee for one creditor's garnishment. However, if a second creditor receives a garnishment judgment, an employee is no longer protected; the decision to fire the employee is left to his employer. Multiple garnishments are allowed; however, the combined amount is still limited to 25 percent of a debtor's disposable income.