Calculating Wage Garnishment Exemptions

Federal law in the United States regulates the modus operandi known as wage garnishment. This is a procedure where a court order deems that a part of a person's earnings or any other type of monetary compensation may be withheld by their employer and given to a creditor in order to pay a debt. Many different types of debt may result in a garnishment, including but not limited to:

• Medical bills
• Student loans
• Court Fines
• Child Support
• Taxes

How Much Can The Court Garnish?

A maximum of twenty-five percent of an individual's disposable wages, or the amount by which the individual's disposable earnings are greater than thirty times the current Federal minimum wage amount are subject to garnishment. If the garnishment is for child support, up to fifty percent may be garnished. Those who earn a low wage may find this quite the hardship. It is possible for an employee to file for a wage garnishment exemption to stop the process from taking place. The procedure for calculating wage garnishment exemptions is straightforward, but must be followed to the letter in order to be legal.

Preparing for Wage Garnishment Exemption

Once you have received notice of a garnishment, a financial disclosure form must be filed with the garnishment court. You will be asked if you think you should be exempt from wage garnishment, and if having your disposable income garnished would put you below the federally mandated poverty level. Part of the disclosure form includes a worksheet that will:

• Multiply your disposable income by twenty-five percent.
• Multiply the number of pay periods you have in a year by thirty times the Federal minimum wage.
• Subtract this second result from your disposable income.
• Subtract the lesser of these two amounts from the deductions for Federal and State taxes.

The amount of money that remains after these deductions is the mount that is available for garnishment from creditors. If this amount is zero or less, no garnishment is possible. There are times when the State laws for garnishment can vary from Federal laws for the same. In these cases, the law that provides the largest exemption amount should be used.

Seeking Legal Assistance for Wage Garnishment

Many people prefer to seek a competent debt settlement lawyer to assist them in applying for a wage garnishment exemption. If you are facing a court ordered wage garnishment, you may want to do the same.