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Wage garnishment is a legal procedure where a portion of a debtor’s earnings are withheld by the employee to repay creditors. This is regarded as a severe consequence and is usually used only when an employee is seriously behind on their debts.

Wage garnishment is the most common type of garnishment and is usually a result of a court order.

It may continue until the entire debt is paid or arrangements are made to pay off debt.

Federal and state law limits the amount of money that can be taken from an employee’s paycheck to pay their debts. When it comes to state laws regarding this issue, there are sure to be differences among them. Due to this, the information provided here will be in accordance with federal law.

The United States Department of Labor, Employment Standards Administration, Wage and Hour Division has specific details regarding a limit on wage garnishment. Details from the Consumer Credit Protection Act (CCPA), Title III, protects an employee from being fired if pay is garnished for only one debt.

This applies to all of the fifty states, District of Columbia, U.S. territories and possessions. It lets creditors get repayment directly from an employee’s paycheck or bank account.

Title III sets maximum amounts that can be garnished in any work week or pay period, no matter how many number of garnishment orders received by an employer. For ordinary garnishments (not those for support, bankruptcy, state, or federal tax), it can be 25% of an employee’s disposable earnings, or the amount where the employee’s earnings are greater than 30 times the federal minimum wage (currently $7.25).

If weekly earnings are less than 30 times minimum wage, garnishing cannot be applied. If wages range between 30 times $7.25 and 40 times $7.25, the difference can be garnished. If the weekly disposable earnings are greater than 40 times minimum wage, then 25% can be garnished. Should a state law regarding wage garnishment differ from Title III, then the lower amount of earnings will be focused on.

Wage garnishment can turn a tough financial situation into an impossible one. When income is tight, the added pressure of a smaller paycheck often becomes the tipping point. A bankruptcy lawyer from our law firm, will work for you and help turn things around. Don’t wait any longer, get the legal help you need today!

At Hines Law, serving the greater Boston area, we give our clients the ability to fight back. Don’t let the large financial institutions push you around. Let our Massachusetts Bankruptcy Attorneys help provide you a fresh start. Call us today for  Free consult!