Know Your Rights: When is Wage Garnishment Objectionable?
When you owe a creditor money, whether it is for a domestic support obligation or judgment, the creditor may be able to garnish your wages. That means that a portion of your regular employment income will automatically be provided to your creditor before you see that money. The judgment creditor will let your employer know that your wages are being garnished, and the business will hold a portion of your income back to provide directly to the creditor.
Wage garnishment takes away your right to receive a portion of income that you have earned. That type of loss is only appropriate in very limited circumstances. You may be able to object to a wage garnishment for a variety of reasons.
The Creditor Does Not Have a Right to Collect
In most circumstances, a creditor must have a judgment before it can garnish your wages. That means that they must have won in court against you. There are a few exceptions to this rule, however. Creditors do not have to have a judgment in Michigan if the debt is for:
- Court-ordered child support
- Child support that is in arrears
- Unpaid income taxes
- Defaulted student loans
Unless the creditor shows that it has a right to garnish your wages because it meets one of the conditions above or because it holds a judgment, garnishment is not appropriate.
The Wage Garnishment is Higher Than Allowed Under State or Federal Law
There are particular limitations on how much a creditor can obtain by garnishing your wages. The idea is that the creditor cannot garnish so much that you cannot live off of your income. Both federal and state law affects the garnishment limitation. In Michigan, the rules are the same as the federal restrictions, however.
For any given work-week, creditors are not allowed to garnish any more than the lesser of either 25% of your disposable earnings or the amount by which your disposable earnings exceeds 30 times the federal hourly minimum wages. The law defines “disposable earnings” as wages left over after the employer makes any required deductions, such as amounts for income taxes and Social Security.
If you owe back child support, your wages can be garnished for up to 50% of your disposable earnings if you are currently supporting a child or spouse who is not subject to the order. If you are not supporting a child or spouse, then 60% of your disposable wages can be taken. They can also take an additional 5% for support payments that are over 12 weeks behind.
Student loan garnishments are limited to either 15% of your disposable income or 30 times the federal minimum wage. If you have more than one garnishment, the total garnishment amount must not be any more than 25% of your disposable income.
Getting Help with Garnishments
Your wages are precious, especially if you are struggling to deal with your overall debt load. Contact MaxwellDunn today to determine whether you have grounds to object to a wage garnishment.