Garnishment is a legal action through which a creditor can seize the assets of a debtor that are in the possession of a third party. This can include current and future wages owed to a debtor if a garnishment action is taken against the debtor's employer. Neither Georgia state law or federal law exempt debtors due to their income levels. However, there are limited exemptions for certain types of assets, and the law limits the amount of a wage garnishment.
Exempted Assets
Federal law exempts Social Security benefit payments from the garnishment of private creditors. However, if the debt is for taxes, student loans or child support payments, this exemption does not apply. Georgia law exempts payments from a state pension plan, but only some municipal pension plans. Payments for state disability and workers' compensation are exempted. While state law exempts the funds in many retirement accounts, it only protects the funds that stay in the account. Once they are withdrawn or distributed, they are subject to garnishment.
Wage Garnishment Laws
State law requires that a private creditor first secure a judgment against the debtor before any wage garnishment action. Government and court action-related debts usually allow a wage garnishment without such a specific judgment. The creditor must have a writ order of garnishment served on the debtor's employer to execute the action. If the writ properly identifies the employer and debtor-employee, the employer must start paying a part of the debtor's wages to the creditor. The amount that can be so garnished is restricted by federal law.
Federal Law Restrictions
Federal law limits the amount of money that can be garnished from the debtor's periodic wage payments. No garnishment amount can be taken unless the debtor-employee earns at least 30 times the hourly minimum wage in a given week. For amounts greater than that limit, garnishment is limited to 25 percent of the net wages for private debts, such as credit cards. For debts regarding support payments, the garnishment can be up to 60 percent. Student loan debt is limited to 10 percent garnishment. Garnishment amounts regarding debts for taxes or from a bankruptcy action, are regulated by the taxing authority or the court.
Other Considerations
Federal law considers net wages to be all gross pay received less only legally mandated payroll deductions. Deductions for retirement or health insurance do not count. The federal maximum is an aggregate limit for all active wage garnishments. The debtor can get relief from the court if the total of his garnished wages exceeds this aggregate limit. The court will also entertain a hardship petition from the debtor in trying to lower any garnishments. Wage garnishments will be stopped if the debtor files for bankruptcy protection.
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