Garnishment Overview and Changes
by: Iowa Legal Aid
The federal minimum wage went up to $7.25 per hour on July 24, 2009. If you work and if a creditor is garnishing part of your income to satisfy a judgment you owe, this could affect you.
Weekly Maximum for Consumer Credit Transactions
A creditor cannot take your whole check to satisfy a judgment for a consumer credit transaction. They can only take a part of it. A consumer credit transaction is almost any purchase or loan that you get for yourself personally. If the judgment for which you are being garnished is from a consumer credit transaction, the rules below apply:
If you make more than $290 per week, a creditor can take either:
- what you make per week minus $290, or
- 25% of what you make every week, whichever is less.
Let's say your weekly income after taxes is $300. The garnishment is for a consumer debt. $290 would be exempt, which leaves $10. 25% of $300 is $75. The most that could be garnished would be $10.
Suppose your disposable income was $250 per week. For a consumer debt, $290 is protected. All of the wages would be exempt.
Weekly Maximum for NON-Consumer Credit Transactions
If it is NOT a consumer credit transaction, you can protect up to 30 times the minimum wage, or $217.50 per week.
Let's say your weekly income after taxes is $300. For a non-consumer debt, $217.50 could be protected, leaving $82.50. We know that 25% of $300 is $75. The creditor can take the lesser of the two amounts. In this case for a non-consumer debt, the creditor can only take $75.
Suppose your disposable income was $250 per week. For a non-consumer debt, $217.50 is protected. This leaves $32.50. $32.50 is less than $62.50 (25% of $250) so the creditor can only take $32.50.
Yearly Maximum for BOTH Consumer and Non-Consumer Transactions
There is also a limit to how much a single creditor can garnish from you each year. This amount did not change with the raise in the federal minimum wage. Here is how much one creditor can garnish from you each year to satisfy a judgment.
| If you make . . . |
Each creditor can take . . . |
| Less than $12,000 per year |
Up to $250 per year |
| $12,000 - $15,999 per year |
Up to $400 per year
|
| $16,000 - $23,999 per year |
Up to $800 per year |
| $24,000 - $34,999 per year |
Up to $1500 per year |
| $35,000 - $50,000 per year |
Up to $2000 per year |
| $50,000 or more per year |
Up to 10% of what you expect to make in a year |
If a creditor is garnishing income from you and you think they took more than the law allows, you can ask the court to look at the garnishment. If you need to find out more about a garnishment, Iowa Legal Aid may be able to help. Helping low-income people with income maintenance issues is a priority for Iowa Legal Aid. Call 1-800-532-1275 to apply for help with your legal problem.
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