Consumer Debt

• Consumer debt refers to credit cards, loans and medical bills, but does not include child support, taxes or government debt. Creditors cannot garnish your wages if your disposable income totals less than $217.50 per week or less, as of June 2011. Creditors may garnish 10 percent or the amount above $217.50, whichever is lesser, if your disposable income is between $217.50 and $290 per week. A creditor may garnish 10 or 25 percent, whichever is lesser, if your disposable income totals more than $290 per week. Creditors may still garnish your wages even if you have a current child or spousal support garnishment, but the garnishment can be no more than 25 percent of your income after the support and mandatory deductions.
  
  

Child Support and Federal Debt

• Federal law allows garnishment for up to 50 percent of your wages if you support a spouse or another child. If you are not married or do not have another child, the government may take up to 60 percent of your wages along with an additional 5 percent if you are more than three months behind in child support payments. The Debt Collection Improvement Act allows up to 15 percent of your disposable income to repay a non-tax debt owed to a federal agency. The Department of Education can garnish up to 10 percent of your disposable income to repay a defaulted student loan.
  
  

Exempt Income

• New York exempts certain income from garnishment. Creditors cannot garnish your Social Security, veterans or public assistance payments. A creditor cannot garnish child and spousal support, workers compensation, unemployment, railroad retirement and black lung benefits. New York prohibits the garnishing of your public and private, retirement savings accounts and principle and 90 percent of private trust payments. Federal agencies can garnish your Social Security under certain circumstances. Federal agencies can garnish up to 15 percent of your Social Security to collect child support, federal taxes and non-tax debts owed to the federal government. No entity, federal, state or private, may garnish supplemental security income.
  
  

Exempt Income Protection Act

• A loophole in previous New York law allowed creditors to obtain payment by freezing accounts with exempt funds. In 2009, Governor David Patterson approved the Exempt Income Protection Act. The Exempt Income Protection Act protects your direct deposit exempt and non-exempt funds should a creditor try to freeze your bank account. Under the act, your bank cannot freeze the first $1,740 of earned income to pay a judgment or garnishment. Your bank cannot freeze the first $2,500 of directly deposited exempt funds.