Wage Garnishment

March 9, 2011
Let’s say you have a judgment against someone and you want to collect it by attaching their
wages. What are the obstacles? Does it make sense to do it? The first obstacle comes from
federal law. Federal law states that the maximum part of the aggregate disposable earnings of an individual for any workweek may not exceed 25% of their disposable earnings for that week or the amount by which their disposable earnings for that week exceeds 30 times the federal
minimum hourly wage, whichever is the smaller amount.

The term “disposable earnings” means the compensation paid after the deduction of items required by law. The second obstacle comes from New Hampshire law. At first glance, New Hampshire would seem to offer very little protection from garnishment: under New Hampshire law, any weekly earnings greater than 50 times the federal minimum wage can be garnished. (However, remember that federal law establishes that no more than 25% of disposable income is subject to garnishment.) But ----New Hampshire does not allow garnishment of wages earned after the creditor gets an order allowing garnishment. In other words, wages must have been earned, but not yet paid, at the time of the garnishment. New Hampshire therefore does not allow a continuing writ or order of garnishment to be put in place like other states do. So let’s try this out. The minimum wage is currently $7.25/hour. If you work 40 hours during the week, you have earned $290. Given the above discussion, you must make more than $290 before a wage garnishment is successful. Let’s say you are making $14.50/hour. For that 40 hours week, you are grossing $580 for the week. Assume that after withholding, social security and medicare, the net weekly wage is $490. These are the disposable wages for the week. Under federal law, the wage garnishment may not exceed 25% of $490 or $122.50. The second test includes the amount by which disposable income exceeds 30 times the federal minimum wage. 30 times the minimum wage is $217.50. Disposable income ($490) exceeds $217.50 by $272.50. The smaller amount is $122.50 and that’s the amount you can attach for that given week. In New Hampshire, you could attach $127.50, but federal law requires the attachment to be the lesser between federal law and state law. In New Hampshire, the creditor needs to keep going back to court to get a wage garnishment order (week after week). This is very costly and very inconvenient. Now you know why it isn’t done very often.