Can overtime pay be garnished by a debt collector?
Summary
Overtime pay can be taken by debt collectors through garnishment, just like regular wages. The law treats overtime earnings as part of your total income, and a portion can be withheld to repay debts under certain rules.Key Facts
- Overtime pay counts as "earnings" and can be garnished just like regular wages.
- Garnishment applies only to your disposable earnings, which is income left after taxes and required deductions.
- For most debts, up to 25% of disposable earnings or the amount over 30 times the federal minimum wage can be garnished, whichever is less.
- Earning more through overtime can increase the amount that can be garnished in dollar terms, but not the percentage.
- Some debts like child support and federal student loans have different garnishment rules and higher limits.
- Debt collectors usually need a court order to garnish wages for consumer debts.
- Some states prevent wage garnishment for most consumer debts, protecting overtime pay in those areas.
- Wage garnishment rules can vary depending on local state laws, affecting how much overtime pay can be taken.
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