How Much Can My Wages Be Garnished in Michigan?
- Under Title III of the Consumer Credit Protection Act, an employer can withhold the lesser of the total by which your disposable wages exceed 30 times the federal hourly minimum wage or 25 percent of your disposable income. The latter is your pay after all legally required deductions, such as payroll taxes, have been withheld. In many cases, the garnishment notice tells your employer the exact amount to withhold based on your pay frequency. In other cases, your employer calculates the withholding according to the agency's requirements. Your employer can withhold multiple garnishments simultaneously, provided the total does not exceed 25 percent of your disposable income.
- A Michigan employer can withhold more than 25 percent of disposable income for tax levies and child support. Federal law allows up to 50 percent of disposable income to be garnished if you are supporting a child or spouse outside of the support order; otherwise, it can withhold up to 60 percent. Your employer can withhold an extra 5 percent for support payments more than 12 weeks late. Your employer uses Publication 1494 to determine an IRS wage levy amount.
Statute of Limitations
- Michigan law gives creditors a judgment 10 years (or more if an extension or renewal is granted) to enforce a wage garnishment. This gives the creditor an advantage: If you have been unemployed for a while and years later gain employment, the creditor can initiate the garnishment at that time. If the creditor has not yet obtained a judgment, it must bring suit within six years for open accounts (such as credit cards), oral contracts and written contracts. The statute of limitations for an IRS wage levy is 10 years after the levy was assessed.
- If your wages are being garnished in Michigan, you can file a "Claim of Exemption" with the issuing court if the garnishment is causing you financial hardship. At the hearing, you must provide proof of your income and expenses and reasoning as to why the garnishment should be lowered or stopped. If a legal entity such as the IRS issued the garnishment, contact the agency for its procedure on filing a hardship claim. You can file for bankruptcy, which stops wage garnishments, but stays on your credit report for up to 10 years. You can try to stop the garnishment by contacting the company you owe and negotiating a settlement amount, which allows you to pay off the debt for less than you owe, or a installment agreement, which allows you to pay it off over time.