The amount that a creditor may garnish (take) from your earnings for debt repayment is limited by California law.
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. In most circumstances, a creditor can’t garnish your salary without first receiving 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.
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. Some states have a lower % restriction on how much of your salary may be garnished. California law additionally considers the state minimum wage and a separate multiplier, and divides that sum in half, resulting in less money withheld.
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.
California Wage Garnishment Limits
The smaller of the following amounts may be garnished from your earnings under California law:
25% of your weekly disposable earnings or 50% of the amount by which your weekly disposable earnings exceed 40 times the state’s hourly minimum wage. If a judgment debtor works in a place where the local minimum hourly wage is higher than the state minimum hourly wage, the computation is based on the local minimum hourly wage in force at the time the earnings are due. 706.050 (Cal. Civ. Proc. Code).
If the debtor can demonstrate necessity, a larger exemption is offered. The percentage of the judgment debtor’s wages that the judgment debtor establishes is essential for the maintenance of the judgment debtor or the judgment debtor’s family supported in whole or in part by the judgment debtor is exempt from levy under this chapter, according to California law. 706.051 (Cal. Civ. Proc. Code).
“Disposable earnings” are the funds provided to the employee after the employer makes the proper legal deductions.
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%. (15 U.S.C. § 1673).
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 sort of garnishment is termed a “administrative garnishment.” However, you may retain an amount equal to 30 times the current federal minimum wage every week. (Under federal law, income up to 30 times the weekly minimum wage is exempt 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. If you owe California state taxes, the state may garnish up to 25% of your net salary to settle your tax liabilities. To learn more, contact your state’s labor department. Below is a link to California’s 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, both state and federal law protect you.
If you have one wage garnishment, your employer cannot fire you, according to federal law. (15 U.S.C. § 1674). However, if you have more than one wage garnishment order, federal law will not protect you. Some states provide greater debtor protection than others. To learn more about state protections, speak with a local attorney.