For creditors attempting to collect on a debt, there are a multitude of options to choose from. However, many individuals who owe debt are reluctant to pay.

One of the ways a creditor can obtain repayment for debt is through wage garnishment. However, it is important to understand what a creditor can and cannot garnish from an individual’s wages for repayment. According to Debt.org, the Consumer Credit Protection Act will limit how much a creditor can garnish from an individual’s paycheck.

What is “too much” from a paycheck?

The legal term for taking too much from an individual’s paycheck is “burdensome.” The idea is that creditors cannot take so much from an individual’s paycheck that it interferes with that person’s ability to live a normal life.

The amount that a creditor can take from an individual’s paycheck is the disposable income amount. “Disposable income” is what the individual has left over after the government takes taxes and Social Security from the paycheck. The laws here are stringent in that other deductions that come from a paycheck that are not required by law will not count. This means that payments for health insurance, union dues, or retirement plans do not count toward disposable income deductions.

What about minimum wage?

The current minimum wage is $7.25 an hour, and the government calculates disposable income at 30 times above the minimum wage. According to the consumer credit protection act, garnishment cannot exceed 25% of the overall disposable earnings of an individual.

Essentially, if the amount of calculated disposable income is $217.30 or less, then creditors may not garnish wages. If the amount is greater than $290, then creditors can garnish a maximum of 25% of that amount.