Types of Debt Eligible for Garnishment
When it comes to the process of wage garnishment, only certain kinds of debt are eligible for wage garnishment. If you fall behind on any of the following types of debt, you may be subjected to wage garnishment:
- Child support
- Alimony or spousal support
- State income taxes or back taxes
- Federal student loans
- Credit cards, medical bills, and all other consumer debt.
How Much Can Be Garnished?
The amount that may be garnished typically depends on the type of debt you have.
Child Support & Alimony
Under federal law, your creditor can garnish:
- 60% of your disposable income when supporting only one child or spouse
- 50% of your disposable income when you are supporting another child or spouse
Usually, about 15% of your disposable income can be subjected to wage garnishment to repay state income taxes or back taxes. However, the exact amount is often determined by the IRS.
Federal Student Loans
Federal student loans are pretty straightforward. Up to 15% of your disposable income can be subjected to wage garnishment if you owe a significant amount of debt for federal student loans.
Credit Cards & Other Debts
Under federal law, your creditor can only garnish one of the following, depending on which is the lower amount:
- 25% of your disposable earnings, or
- Your disposable earnings less than 30 times the federal minimum wage
Laws Addressing Wage Garnishment
There are a number of different laws that legislate how wage garnishment works in Oregon. Here are just a few of the federal and state laws that address wage garnishment:
Title III of the Consumer Credit Protection Act (CCPA)
Under the wage garnishment provision of the Consumer Credit Protection Act (CCPA), employees are protected from being discharged by their employers because their wages have been garnished for any one debt. Also, Title III limits the amount of an employee's earnings that may be garnished in any one week. However, an employee who has his or her wages garnished for a second time or for subsequent debts is not protected from discharge under Title III.
Recent Changes to Oregon Law
According to Oregon Revised Statutes Section 18.385, 75% of the disposable earnings of an individual are exempt from wage garnishment. As of January 1, 2020, other wage garnishment limits include:
- $254 per week
- $509 per two-week period
- $545 per half-month period, and
- $1,090 per month.
How to Stop Wage Garnishment
Making ends meet when your wages have been garnished can be challenging. Some possible options to stop wage garnishment include:
- Fight the garnishment by filing a petition or claim of exemption with the court.
- Negotiate a repayment plan with your creditors to settle your debt.
- File for bankruptcy to stop wage garnishment and eliminate your debt.
Filing For Bankruptcy
Filing for bankruptcy automatically triggers a federal court order known as an "automatic stay" on your existing debts. This automatic stay prohibits wage garnishment, creditor harassment, and other forms of debt collection.
Also, the automatic stay will prevent debt collectors from foreclosing, repossessing, or evicting you from your home. However, wage garnishment laws do not eliminate or cancel out any current domestic support obligations, such as child support or alimony. Only a family court order can put a stop to these types of financial obligations.
How an Experienced Attorney Can Help
Your wages may be garnished if you owe alimony, child support, past-due taxes, or student loans. However, the decision to withhold or take a specific chunk of your paycheck is not something you have to accept willingly. If you're facing the possibility of wage garnishment, it is important that you act quickly. An experienced bankruptcy attorney can help you fight the garnishment and outline a strategic plan to help you find debt relief while avoiding wage garnishment.
Bankruptcy attorney Lyndon Ruhnke has devoted his entire career to offering comprehensive legal guidance and experienced representation to clients facing legal matters related to debt relief, bankruptcy, and wage garnishment. As your legal counsel, Lyndon Ruhnke can help you better understand how wage garnishment works and explore all of the possible legal options that you have that can put a stop to it. Using his extensive experience, he will do everything he can to fight the garnishment before contacting your creditors to negotiate a satisfactory repayment agreement to settle your debts. Don’t face these challenges on your own. Call or reach out to Lyndon Ruhnke, P.C. today to receive reliable legal guidance and support.