New Jersey law limits the amount that a creditor can garnish (take) from your wages for repayment of debts. The New Jersey wage execution laws (also called wage garnishments or attachments) are even stricter than federal wage garnishment laws. For the most part, creditors with judgments can take only 10-25% of your wages. However, for a few types of debts, creditors can take more.
Read on to learn about wage garnishment law in New Jersey.
What Is a Wage Garnishment?
A wage garnishment or wage attachment is an order from a court or a government agency that is sent to your employer. It requires your employer to withhold a certain amount of money from your paycheck and then send this money directly to your creditor.
Different garnishment rules apply to different types of debt -- and there are legal limits on how much of your paycheck can be garnished.
To learn more about how wage garnishments work, how to object to a wage garnishment, and more, see our Wage Garnishments & Attachments topic.
When Can a Creditor Garnish Your Wages in New Jersey?
Most creditors cannot get a wage garnishment order until they have first obtained a court judgment stating that you owe the creditor money. For example, if you are behind on credit card payments or owe a doctor’s bill, those creditors cannot garnish your wages (unless they sue you and get a judgment).
However, there are a few exceptions to this rule. Your wages can be garnished without a court judgment for:
- unpaid income taxes
- court ordered child support
- child support arrears, and
- defaulted student loans.
Limits on Wage Garnishment in New Jersey
There are limits to how much money can be garnished from your paycheck. The idea is that you should have enough left to pay for living expenses.
Federal law places limits on wage garnishment amounts. The states are free to impose stricter limits, and under certain circumstances, New Jersey has done so. That means the both federal and state law dictate how much can be garnished in New Jersey. Here are the rules.
Under federal law, your creditor can garnish:
- 25% of your disposable earnings, or
- your disposable earnings less 30 times the federal minimum wage (currently $7.25), whichever is less.
If the amount based on the New Jersey law is less than the amount permitted under federal law, your creditor may only take the lesser amount. Below are the rules under New Jersey law:
- up to 10% of your income if you earn no more than 250% of the federal poverty level for a household of your size, or
- up to 25% if you earn more than 250% of the federal poverty level.
“Disposable earnings” are those wages left after your employer has made deductions required by law.
You can find the current federal poverty levels, by family size, on the Department of Health and Human Services website at http://aspe.hhs.gov/poverty/12poverty.shtml.
Example. The 2012 poverty level for a household of two is $15,130. 250% of that amount is $37,825. You are married and earn $400 per week in gross wages (before taxes), and take home $300 per week after taxes are deducted. Your gross wages are $20,800 per year; thus, you earn less than 250% of the poverty level and under New Jersey law, your creditor can only take up to 10% of your gross income, or $40. Under federal law, your creditor can take up to 25% of your disposable earnings, or $75. Your creditor can take the lesser amount, or $40 per week, to repay your debt.
Military pay and benefits are 100% exempt from garnishment in New Jersey.
Special Limits for Child Support, Student Loans, and Unpaid Taxes
If you owe child support, student loans, or taxes, the government or creditor can garnish your wages without getting a court judgment. The amount that can be garnished is different too.
Since 1988, all court orders for child support include an automatic income withholding order. The other parent can also get a wage garnishment order from the court if you get behind in child support payments. (To learn about income withholding orders and other ways child support can be collected, see Child Support Enforcement Obligations.)
Federal law limits what can be taken from your paycheck for this type of wage garnishment. Up to 50% of your disposable earnings may be garnished to pay child support if you are currently supporting a spouse or a child who isn't the subject of the order. If you aren't supporting a spouse or child, up to 60% of your earnings may be taken. An additional five percent may be garnished for support payments over 12 weeks in arrears. (Learn more aboutwage garnishment for child support arrears.)
Student Loans in Default
If you are in default on a federal student loan, the U.S. Department of Education or any entity collecting for this agency can garnish your wages without first getting a court judgment – this is called an administrative garnishment. The most that the Department of Education can garnish is 15% of your disposable income, but not more than 30 times the minimum wage. To learn more, see the articles in Student Loan Debt.
The federal government can garnish your wages if you owe back taxes, even without a court judgment. The amount it can garnish depends on how many dependents you have and your deduction rate.
States and local governments may also be able to garnish your wages to collect unpaid state and local taxes. Contact your state labor department to find out more.
Total Amount of Garnishment
If you have more than one garnishment, the total amount that can be garnished is limited to 10-25%, depending upon whether you earn more than the federal poverty level. For example, if you earn more than the federal poverty level and the federal government is garnishing 15% of your income to repay defaulted student loans and your employer receives a second wage garnishment order, the employer can only take another 10% of your income to send to the second creditor.
Restrictions on Job Termination Due to Wage Garnishments
Complying with wage garnishment orders can be a hassle for your employer; some might be inclined to terminate your employment rather than comply with the order. State and federal law provides some protection for you in this situation.
In New Jersey, your employer cannot fire you because you received a wage garnishment order.
For More Information on New Jersey Wage Garnishment Laws
To find more information about wage garnishment limits in New Jersey, including the procedures that employers must follow in carrying out wage garnishment orders, check out the website of the New Jersey State Legislature atwww.njleg.state.nj.us and click on “statutes.”