Once a creditor gets a judgment against you, one of the tools that it can use to secure the money that is owed is wage garnishment. This is a process by which the creditor takes money directly out of your paycheck. When a creditor uses this technique, it can only take up to a certain amount of your pay.
Percentage of Income
When it comes to wage garnishment, the federal government has laws that help protect you from having too much money taken out of your pay. According to federal rules, a maximum of 25 percent of your income can be taken through wage garnishment. While the federal government uses the 25 percent barrier, state governments also have their own laws when it comes to wage garnishment. Several states have lower limits than what the federal government allows.
State Annual Limits
While the federal government uses a percentage limit to determine how much of your pay can be taken through wage garnishment, some states have annual wage garnishment caps. In addition to putting a limit on the percentage of your paycheck that can be taken, the state may also have an annual cap. Once this cap is reached, creditors can no longer take any more of your paycheck even if multiple creditors have judgments against you.
Based on Wages
While each state is different and has its own rules, some states use a wage bracket system to determine the annual cap on wage garnishment. For example, in the state of Iowa, if your income is under $12,000 per year, the maximum amount of annual garnishment that creditors can take is $250, as of 2011. As your income increases, your creditors can take more out of your annual pay up to the annual cap limit.
Lowering the Garnishment
When a wage garnishment is enforced, you could potentially find a way to lower the amount that is taken out of your check. Even if the creditor is within the boundaries of the law when taking money out of your paycheck, you could argue that the amount taken makes it impossible for you to maintain even a minimum standard of living. You will need to argue your case to the court that gave the judgment.
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