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A “wage garnishment,” also known as a “wage attachment,” is an order that requires your employer to deduct a particular amount of money from your salary and deliver it straight to one of your creditors. Most creditors cannot garnish your salary unless they first get a money judgment from a court. For example, if you fall behind on credit card payments or owe a doctor’s bill, your income cannot be garnished until you litigate and get a judgment. Some creditors, such as those owed taxes, federal student loans, child support, or alimony, do not need to file a lawsuit in order to garnish your wages. These creditors have the legal ability to deduct money immediately from your paycheck.
However, creditors cannot grab your whole salary. The amount of your income that may be garnished is determined by many laws and legal constraints. For example, federal law restricts the amount of judgment creditors may collect. The garnishment amount is restricted to 25% of your disposable weekly earnings (what’s left after obligatory deductions) or the amount by which your disposable weekly earnings exceed 30 times the federal minimum hourly rate, whichever is smaller. (15 U.S.C. § 1673). Some states have a lower % restriction on how much of your salary may be garnished. Arizona wage garnishment rules are basically the same as federal wage garnishment statutes, with a few exceptions.
The creditor will continue to garnish your earnings until you pay off the amount or take action to halt the garnishment, such as filing an exemption with the court. The quantity of money you may keep is determined by your state’s exemption regulations. Depending on your circumstances, you may be allowed to retain some or all of your money. Filing for bankruptcy may also allow you to cease most garnishments.
Wage Garnishment Limits in Arizona
Again, federal law restricts the amount of pay garnishment. While states may establish greater limitations, Arizona’s wage garnishment rules are essentially identical to federal law.
On a weekly basis, the garnishment can’t exceed the lesser of:
25% of your disposable weekly earnings, or the amount by which your disposable weekly earnings exceed 30 times the federal minimum hourly rate. (Arizona Revised Statutes 33-1131).
However, in the event of “severe economic hardship,” an Arizona garnishment may be lowered to no less than 15%. (Arizona Revised Statutes 12-1598.10(B)).
Furthermore, garnishment is prohibited if the debt was subject to an effective debt-scheduling arrangement between the judgment debtor and a certified debt counseling group at the time the writ was served. (Arizona Revised Statutes 12-1598.10(B)). (“Debt scheduling” refers to receiving counseling and support from a registered debt counseling group and establishing a debt payment schedule.) (Arizona Revised Statutes 12-1598).
Child Support, Student Loan, and Unpaid Taxes Limits
If you owe child support, federal student loans, or taxes, the government or a creditor may garnish your earnings without a court order. The amount that may be garnished differs from that of judgment creditors.
Unpaid Child Support Garnishment Limits
Since 1988, all child support orders have included an automatic income withholding order. If you fall behind on child support payments, the other parent may seek a wage garnishment order from the court.
This form of wage garnishment is prohibited under federal law. If you are presently supporting a spouse or kid who is not the subject of the order, up to 50% of your disposable wages may be taken to pay child support. If you do not support a spouse or kid, the government may confiscate up to 60% of your wages. If you are more than 12 weeks behind on your payments, you may be charged an extra 5%. This federal statute is followed by Idaho state law. (15 U.S.C. § 1673).
According to Arizona law, a support order may take 50% of your disposable income. (Arizona Revised Statutes 33-1131).
Maximum Garnishment for Federal Student Loans in Default
If you are in default on a federal student loan, the United States Department of Education or any firm collecting for this agency has the authority to garnish up to 15% of your wages. (20 U.S.C. § 1095a(a)(1)). This is referred to as a “administrative garnishment.” However, you may retain an amount equal to 30 times the current federal minimum wage every week. (Recall that federal law protects income up to 30 times the minimum wage per week from garnishment.) (15 U.S.C. § 1673).
Limits on Garnishment for Unpaid Taxes
If you owe unpaid taxes, the federal government may garnish your earnings (called a “levy”) even if you do not have a court judgment. The weekly exempt amount is calculated by adding the taxpayer’s standard deduction and the aggregate amount of personal exemption deductions permitted in the taxable year in which the levy occurs. The sum is then divided by 52. If you fail to verify the standard deduction and the number of dependents you are allowed to claim on your tax return, the IRS bases the amount exempt from levy on the standard deduction for a married individual filing separately with just one personal exemption (26 U.S.C. 6334(d)).
States and municipalities may also be entitled to garnish your salary in order to collect outstanding state and local taxes. To learn more, contact your state labor department.
How to Keep Your Wages Safe From Garnishment
If you get a notification of a wage garnishment order, you may be able to safeguard or “exempt” part or all of your earnings by submitting an exemption claim or making an objection with the court. The processes you must take to object to a wage garnishment vary depending on the kind of debt sought by the creditor and the laws of your state.
Most garnishments may also be stopped by filing for bankruptcy. The quantity of money you may keep is determined by your state’s exemption regulations.
Job Termination Restrictions Due to Wage Garnishments
Complying with wage garnishment orders might be difficult for your employer; some may choose to fire you rather than comply. In this circumstance, federal law gives you some protection. If you have one wage garnishment, your employer cannot fire you under federal law. (15 U.S.C. § 1674).
Some states provide greater debtor protection than others. Your employer in Arizona cannot terminate you because you have a child support withholding order. New recruits, returning workers, or rehired employees may be compelled to declare if they have an existing child support withholding order, but the employer cannot use this information to discriminate or make hiring, terminating, or disciplinary decisions. (Ariz. Rev. Stat. § 23-722.02).
Obtaining Additional Information on Arizona Wage Garnishment Laws
This page gives an overview of the wage garnishment laws in Arizona. More information about garnishment in general may be found on the website of the United States Department of Labor. Visit the Arizona Judicial Branch website for additional information on Arizona wage garnishment rules, including the processes that employers must follow in carrying out wage garnishment orders.