Wage garnishment (also “wage withholding” or “wage attachment”) is when a creditor takes money from your paycheck before you are paid. Both federal law and New Mexico law limit the amount that creditors can take from your paycheck. But the New Mexico law is more generous for debtor4s -- it allows you to keep more of your wages in certain situations. In New Mexico, most creditors can garnish up to 25% of your wages to apply to your debts. There are some circumstances under which a creditor may be able to take more.
Read on to learn more about wage garnishment in New Mexico.
What Is a Wage Garnishment?
A wage garnishment order or income withholding order is issued by a court or a government agency and sent to your employer. The order requires your employer to withhold a certain amount of money from your paycheck and 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 Garnishment and Attachment topic.
When Can a Creditor Garnish Your Wages in New Mexico?
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 hospital bill, those creditors cannot garnish your wages before they sue you and obtain 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 Mexico
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 your living expenses.
Federal law places limits on wage garnishment amounts. However, New Mexico law imposes even stricter limits. This means that in New Mexico, the most that can be garnished from your wages is the lesser of:
- 25% of your disposable earnings, or
- the amount by which your weekly disposable earnings exceed 40 times the federal hourly minimum wage (currently $7.25/hour).
“Disposable earnings” are those wages left after your employer has made deductions required by law.
Example. You take home $1,000 per week after taxes are deducted. 25% of your disposable earnings is $250, and your disposable earnings less 40 times the federal minimum wage is $710. Your employer can send the lesser amount ($250) to your creditor to repay your debt.
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 as well.
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 5% may be garnished for support payments over 12 weeks in arrears. (Learn more about wage garnishment for child support arrears.)
New Mexico limits the amount that can be garnished for child support to 50% of your disposable earnings.
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 25% or 40 times the federal minimum wage for any given workweek. For example, if 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.
According to federal law, your employer cannot discharge you if you have one wage garnishment. However, federal law won’t protect you if you have more than one wage garnishment order.
For More Information on New Mexico Wage Garnishment Laws
To find more information about wage garnishment laws in New Mexico, check out the website of the New Mexico Compilation Commission.
To learn more about how wage garnishments work, how to object to a wage garnishment, and more, see our Wage Garnishments & Attachments topic.