What Is a Wage Garnishment in Michigan and How Much Can They Take?
A wage garnishment can come as an unwelcome surprise for many Michigan residents. If you’ve fallen behind on credit cards, medical bills, personal loans, or other debts, a creditor may eventually obtain a court order allowing part of your paycheck to be taken before you receive it.
In Michigan, a wage garnishment is a legal process where an employer is required to withhold a portion of an employee’s earnings and send that money directly to a creditor to satisfy a debt. In most cases, the creditor must first sue you and obtain a judgment before garnishing your wages. However, certain debts, such as child support, taxes, and some federal student loans, may have different rules and may not require a traditional lawsuit.
So, how much can they take?
For most consumer debts, Michigan law generally limits wage garnishments to the lesser of:
- 25% of your disposable earnings, or
- The amount by which your disposable earnings exceed 30 times the federal minimum wage.
“Disposable earnings” means the amount left after legally required deductions, such as federal and state taxes and Social Security. Voluntary deductions for insurance or retirement plans are generally not subtracted when calculating disposable earnings.
Some types of debt have different garnishment limits. For example, child support obligations can result in garnishments of up to 50% or 60% of disposable earnings, depending on your circumstances. Federal tax debts and certain student loans also follow separate rules.
The good news is that receiving a wage garnishment does not necessarily mean you are out of options. Michigan law provides procedures for objecting to an improper garnishment, and some income may be exempt from collection. Additionally, filing for bankruptcy can often stop most wage garnishments immediately through the protection of the automatic stay. In some situations, bankruptcy may even allow you to recover wages that were garnished shortly before filing.
If your wages are being garnished, it is important to act quickly. The sooner you understand your rights and available options, the better your chances of protecting your income and regaining financial stability. An experienced Michigan bankruptcy attorney can review your situation and help determine the best path forward for you and your family.