Yes. There are two limitations on how much of your wages can be garnished. One is the amount that can be garnished per calendar year (2005, 2006, etc.). The second is the amount that can be garnished per pay period (weekly, every two weeks, two times per month, or monthly).
The amount that can be garnished per calendar year depends on your expected earnings during that calendar year. ?Earnings? are money you get paid for work whether called wages, commission, bonus, or anything else.
Here are the limits each judgment creditor can take from your earnings in one year:
Expected Earnings
Calendar Year
|
Limit on Wage Garnishment per Calendar
Year for each Judgment Creditor |
| $0-$11,999 |
$ 250
|
| $12,000-$15,999 |
$ 400
|
| $16,000-$23,999 |
$ 800
|
| $24,000-$34,999 |
$1500
|
| $35,000-$49,999 |
$2000
|
| Over $50,000 |
10% of expected earnings |
The second limit is the total amount that can be garnished per pay period. This limit depends on the type of debt on which you were sued. For purposes of wage garnishment limit, debts are either ?consumer debts? or ?non-consumer debts.?
A consumer debt is a debt:
- for a personal or family purpose, not a business reason;
- for which you are charged interest, or a finance charge, or you pay in installments; and
- for less than $25,000. Common consumer debts are credit cards and car loans.
A non-consumer debt is everything that is not consumer debt.
The limitation on the amount of wages that can be garnished depends on the federal (not Iowa) minimum wage. The federal minimum wage is $5.15 per hour.
The law states that in a consumer debt, either
- 75% of disposable earnings or
- 40 times the minimum wage is exempt (protected) from garnishment, whichever is greater.
In a non-consumer debt, the greater of
- 75% of disposable earnings or
- 30 times the minimum wage
is exempt from garnishment.
?Disposable earnings? are your earnings (the amount of money you get paid for work) minus social security (FICA), minus federal withholding, minus state withholding, and minus anything else required to be withheld by law.
The following chart has the amounts that a debtor can keep for different pay periods and for consumer/non-consumer debts:
Pay Period
|
Non-Consumer Debt
(30 times the Minimum Wage of $5.15) |
Consumer Debt
(40 times the Minimum Wage of $5.15) |
| Every week |
$154.50 |
$206.00 |
| Every 2 weeks |
$309.00 |
$412.00
|
| 2 times per month |
$334.75 |
$446.33
|
| Monthly |
$669.50 |
$892.67 |
These limits apply to wages only. They do not apply to garnishment of other assets such as bank accounts.
The law concerning garnishment also provide for a special court hearing. The hearing can be called for by the debtor or the creditor. Its purpose is to decide the proper level of garnishable wages, based on total income. The law grants the Judge specific power to set the garnishment level in a given case below what the above income formula suggests, if special needs of the household or other factors warrant it.
As stated earlier, these limits only apply to wage garnishment for judgment creditors. There are very different limits on garnishment for child support or back taxes. In general, those types of garnishment can take out a lot more of your wages.
The Iowa Supreme Court has held that wages put in a checking or savings account are still considered wages for 90 days. The money is protected under wage garnishment law for 90 days.
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