Wage garnishment is the amount that creditors can take from your paychecks for the repayment of debt you owe. In Iowa, state and federal wage garnishment laws will apply to both you and the creditor. Iowa wage garnishment laws are more strict that federal wage garnishment law because they place a cap on the total sum certain creditors may garnish during a single year. In short, creditors are limited to collecting 25% of net wages after deductions in Iowa. There are a few exceptions to this general rule, allowing some creditors to take more.
What is wage garnishment?
Wage garnishment, also known as a wage attachment, is an order from a court or government agency that allows creditors to have your employer take money out of your paychecks/wages and pay it directly to them.
Different types of debts have different rules and laws that apply to them. Under Iowa law, there are limits to how much certain creditors can take from your wages.
When can a creditor garnish my wages in Iowa?
Most creditors can’t get a wage garnishment order until they have gone to court and obtained a judgment stating that you owe the creditor money. For example, if you owe money to a credit card company or a hospital, they first have to go to court and get a judgment against you before they can collect money from your paychecks.
There are a few exceptions to this general rule, mainly in situations where the government is involved.
Your wages can be garnished without a judgment for:
- Court ordered child support;
- Child support arrears;
- Unpaid income taxes;
- Defaulted student loans.
Wage Garnishment Limitations in Iowa
There are statutory limitations to how much money can be garnished from your paycheck. In short, Federal and Iowa law wants to leave you with enough money to pay your living expenses.
Federal law places limits on garnishments. Iowa follows federal law for the percentage of a paycheck that can be garnished.
During any work week, creditors may only garnish the lesser of the following:
- 25% of your disposable earnings, or
- The amount by which your weekly disposable earnings exceed 30 times the federal minimum wage.
“Disposable earnings” are what’s left after your employer has made their deductions.
Iowa wage garnishment laws place an additional cap on the aggregate amount that each judgement creditor can garnish during a single calendar year. This applies no matter how many judgments someone has.
Iowa has the following caps:
- If your earnings are below $12,000 per year, up to $250 can be garnished.
- If your earnings are between $12,000 and $15,999 per year, up to $400 can be garnished.
- If your earnings are between $16,000 and $23,999 per year, up to $800 can be garnished.
- If your earnings are between $24,000 and $34,999 per year, up to $1,500 can be garnished.
- If your earnings are between $35,000 and $49,999 per year, up to $2,000 can be garnished.
- If your earnings are $50,000 or more, no more than 10% of your wages may be garnished.
Limits, exemptions for child support, unpaid taxes and student loans
If you owe child support, unpaid taxes, or student loans, the government or a creditor can garnish your wages without a judgement from the court. They also are not bound by the above restrictions.
Student Loan Defaults
If you are in default on a federal student loan, the Department of Education or any company collecting on behalf of them may garnish your wages without a court judgment. It is called an administrative garnishment. Federal law restricts the amount the Department of Education can garnish to 15% of your disposable income, but not more than 30 times the minimum wage.
Unpaid Taxes
The federal government can garnish your wages if you owe back taxes. This can be done without a judgment from the court. The sum they can garnish depends on your deduction rate and how many dependents you have. Additionally, Iowa and your local government can often garnish your wages to collect unpaid taxes.
Child Support
All court orders for child support include an order for automatic withholding of income. The other parent can additionally get a wage garnishment order from the court if the payor is behind.
Iowa follows federal regulations when it comes to wage garnishment for child support. Up to 50% of your disposable earnings may be garnished to pay child support if you’re supporting a spouse or child who isn’t subject to the order. If you aren’t supporting a spouse or child, up to 60% of your earnings can get taken. An additional 5% may be garnished for support payments over 12 weeks. Iowa’s maximum garnishment limits don’t apply to alimony or child support.
Total Garnishments
If you have multiple garnishments, the total garnished is limited to 25%. If you have a garnishment for taxes, for example, of 20% of your wages, a second wage garnishment may only collect 5% of your wages.
Can my employer fire me for having a wage garnishment?
Iowa and federal law protects you from being fired for having your wages garnished. Under federal law, your employer cannot discharge you if you have one wage garnishment. There aren’t protections under federal law for multiple garnishment orders. However, under Iowa law, an employer can’t discharge you because of any wage garnishment.
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