Indiana's laws governing wage garnishment are codified in the Indiana Code Section 24-4.5-5-105. Indiana law allows creditors to garnish the same amount as that prescribed in Title III of the Consumer Credit Protection Act. Multiple garnishments are allowed as long as the combined amount does not exceed 25 percent of an employee's disposable income.
Head of Household Exemption
According to the Internal Revenue Service, an individual can file as head of household if he was unmarried on the last day of the calendar year, paid over half the cost of maintaining his home all year and lived with a "qualifying person" for more than half the calendar year. Qualifying persons include minor children or parents. As of 2011, Florida is the only state with a head of household exemption. As such, a Florida resident who qualifies as head of household can successfully overcome a garnishment judgment. Although Indiana has no such exemption, Indiana law still sets limits on the percentage of wages a garnisher can collect.
Indiana Garnishment Limits
Indiana's law -- not unlike Title III -- allows creditors to collect up to 25 percent of an employee's disposable earnings or "the amount by which his disposable earnings for that week exceed thirty times the federal minimum wage," whichever is less. Disposable income is whatever wages are left after involuntary deductions, such as taxes and Social Security, are withheld.
Multiple Garnishments
Title III makes it illegal for an employer to fire an employee for a first creditor's garnishment. However, employers may terminate an employee after a second creditor's garnishment. Whether an employer decides to do so typically depends on company policy. If indeed two separate creditors obtain garnishment judgments, the combined amount withdrawn cannot exceed 25 percent of the employee's disposable earnings.
Additional Considerations
Where an employee owes child support, child support withholdings can exceed 25 percent of disposable earnings. Additionally, if child support is owed, other creditors must wait to collect on garnishment judgments. Although Indiana has no head of household exemption, a judge can order garnishment amounts lowered if a debtor can prove extreme financial hardship, procedural error or that the statute of limitations has passed.
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