Wage Garnishments and Bankruptcy

Posted by Wesley Scott on February 27, 2020 at 3:48 PM
Wesley Scott

Bankruptcy Chapter 13After the creditor recovers a money judgement (usually by default), the creditor will seek to execute this judgement.  Wage garnishments are common way for creditors to enforce the judgement.  Since wage garnishments threaten your ability to survive, there are exemption statues at both the state and federal level exempting from garnishment a portion of your earnings.  The Federal Wage Garnishment Law applies throughout the United States and provides two limits: (1) a floor preventing any wage garnishment for low income workers; and (2) a maximum percentage that may be garnished for high income workers. The garnishment floor is 30 times federal minimum wage per week.  If you make less than 30 times the federal minimum wage per week, all your wages would be exempt. If you earn over 30 times the minimum wage per week a creditor could garnish the excess up to 25% of your disposable earnings. (“Disposable” wages are the earnings that remain after deducting all withholdings required by law)

States also provide wage garnishment exemptions.  In Minnesota (unless the judgment is for child support) the garnishment may not exceed 25% of your disposable wages, or the garnishment may not exceed the amount of your disposable earnings that exceeds 40 times the federal minimum hourly wage per week. States, like Minnesota, can offer more generous wage garnishment exemptions than the federal garnishment limits, but they cannot be less generous than the federal limits.

There are exceptions to wage garnishments-one most important exceptions is for Social Security income.  

CONCLUSION

The prospect of a wage garnishment can be a chilling thought.  And while there are limits and exclusions to wage garnishments, a reduction in income will certainly impact your quality of life.  Kain and Scott can help to stop wage garnishments. Contact the attorneys at Kain and Scott and see us at www.kainscott.com. You will be glad you did!   

 

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