## Wage garnishment + defense in New Jersey **Wage garnishment** is when a creditor obtains a court order to take a portion of your wages directly from your employer. New Jersey has both federal + state limits, plus exemptions and procedural defenses. ## Federal wage-garnishment limits **CCPA (Consumer Credit Protection Act):** - **Lesser of**: - 25% of disposable income, OR - Amount by which weekly disposable income exceeds 30× federal minimum wage ($217.50/week at $7.25) - Applies to consumer debt judgments **Disposable income = gross income minus:** - Federal income tax - State income tax - Social Security - Medicare - Mandatory pension - Mandatory disability insurance **NOT subtracted:** - Voluntary 401(k) - Health insurance - Garnishments - Voluntary deductions ## State garnishment caps **${s.name}-specific limits:** - May be lower than federal - Apply lower of federal/state - ${s.name}-specific exemptions - ${s.name}-specific procedures **"No-garnishment" states:** - **Texas** — generally no consumer wage garnishment (with limited exceptions) - **North Carolina** — very limited - **Pennsylvania** — very limited - **South Carolina** — limited **These states protect wages but allow:** - Federal IRS levies - Federal student loans - Child support / alimony - Sometimes property taxes ## Different rules for different debt types **Higher caps for:** **Child support / alimony:** - Up to 50% if supporting another spouse/child - Up to 60% if not supporting another - Plus 5% additional if more than 12 weeks behind - Strongest creditor rights **Federal student loans:** - Up to 15% of disposable income - Administrative wage garnishment - 30 days notice - Specific procedures **Federal taxes (IRS):** - Special rules (very flexible amounts) - Form 668-W process - Exempt amount based on filing status + dependents - Often nearly all wages **Bankruptcy / federal court orders:** - Specific to case ## Process **Standard creditor garnishment:** **1. Lawsuit + judgment:** - Creditor sues - Wins (often default judgment) - Judgment entered **2. Garnishment writ:** - Filed with court - Served on employer - Specifies amount + duration **3. Employer notification:** - Employer required to comply - Begin withholding next pay period - Forward funds to creditor (or court) - Continue until debt + costs satisfied **4. Notice to debtor:** - Required notice of garnishment - Right to claim exemptions - Hearing rights - ${s.name} specific procedures ## Defenses + challenges **Procedural defenses:** - **Improper service** of garnishment - **Service of judgment** issues - **Defective writ** of garnishment - **Wrong name / SSN** - **Wrong employer** **Substantive defenses:** - **Already paid** — debt satisfied - **Settlement** — agreement covers - **Wrong amount** — calculation errors - **Exemption** — protected income - **Statute of limitations** — judgment expired - **Bankruptcy discharge** — debt eliminated - **Identity theft** — not your debt **Exemptions (vary by state):** - Head of household (some states) - Public benefits (Social Security, SSI, VA, etc.) - Pensions / retirement (state + federal rules) - Unemployment compensation - Workers' compensation - Certain insurance proceeds - Child support received - Alimony received (sometimes) - Tax refunds (limited) ## Head-of-household exemption **Available in some states:** - Florida (very strong) - Texas - Tennessee - Georgia - Several others **Typical requirements:** - Provide majority of household support - Have dependents - File claim of exemption - Often complete protection from creditor garnishment **${s.name} may have specific provisions** — check local law. ## Bank account garnishment **Different from wage garnishment:** - Creditor levies entire account - Even if exempt funds (Social Security) - Burden on debtor to claim exemption - Federal protection for direct-deposit Social Security (2 months protected automatically) - Mixing funds compromises protection **To protect Social Security / federal benefits:** - Direct deposit recommended - Don't mix with other funds - Keep separate account if possible ## Tax refunds + intercepts **Treasury Offset Program (TOP):** - Federal tax refunds intercepted - Federal student loans - Child support - State income tax - Other federal debts - Limited defenses **Innocent spouse relief possible** for joint refunds. ## Stop wage garnishment **Options:** **1. Pay it off:** - Lump sum - Negotiated settlement - Often discount possible **2. Bankruptcy:** - Chapter 7 — discharges most consumer debt + stops garnishment - Chapter 13 — manages payments - Automatic stay stops collection immediately - Often the best option **3. Claim of exemption:** - File with court - Proves exempt income - Specific procedures + deadlines - ${s.name} requirements **4. Negotiate with creditor:** - Settlement - Payment plan - Reduced amount - Sometimes effective **5. Challenge underlying judgment:** - If recently entered - Procedural / substantive defects - Limited window typically **6. Vacate default judgment:** - If never properly served - ${s.name} specific procedures - Better than garnishment defense ## Bankruptcy + automatic stay **Filing bankruptcy stops garnishment IMMEDIATELY:** - Section 362 automatic stay - Effective when bankruptcy petition filed - Notice to employers / banks - Continues until discharge or dismissal - Violations subject to damages **Especially valuable when:** - Multiple garnishments - Wage garnishment + bank levies + property liens - Cannot afford basic living expenses - Other debt also unmanageable ## Multiple creditors **Priority order:** 1. Bankruptcy stays all 2. Federal tax (IRS) 3. Child support / alimony 4. Federal student loans 5. State / local taxes 6. First-in-time consumer creditor 7. Subsequent creditors **Total never exceeds federal/state cap.** ## Employer issues **Employer obligations:** - Cannot fire for first garnishment - 15 USC § 1674 (federal) - Multiple garnishments may permit termination - ${s.name} specific employer protections **Employer responsibilities:** - Comply with writ promptly - Calculate amounts correctly - Forward properly - Don't garnish exempt amounts - Notify employee - Liability if errors ## Long-term consequences **Beyond immediate financial impact:** - Credit report entry - Continuing collection costs - Possible additional litigation - Other creditors notice + may sue - Stress + employment impact **Often best to address debt** before garnishment begins. ## Common mistakes - Ignoring lawsuit (default judgment) - Not claiming exemptions promptly - Mixing exempt + non-exempt funds - Not filing bankruptcy when appropriate - Letting garnishment continue without action - Not negotiating settlement - Quitting job to avoid (creates new problems) - Hiding assets / income (criminal) ## What you should do If facing wage garnishment in New Jersey: act immediately — calculate your exempt amount, file claim of exemption if applicable, consider bankruptcy if multiple creditors. Many New Jersey consumer attorneys offer free consultations. Bankruptcy attorneys provide best total relief in many cases. Don't ignore court paperwork — defaults make everything worse. --- *This guide is general information about federal + New Jersey law as of mid-2026 and is not legal advice. Wage garnishment is technical + time-sensitive. Talk to a licensed New Jersey consumer / bankruptcy attorney about your specific situation.*