DISPOSABLE EARNINGS
That portion of one’s income that a person is free
to spend or invest as he or she sees fit, after pay-
ment of taxes and other obligations.
Legally mandated deductions are those for
the payment of taxes and SOCIAL SECURITY.Any
deductions for medical insurance, PENSION
plans, life insurance, or employee savings plans
do not qualify and must be included in the dis-
posable earnings. Take-home pay is, therefore,
not necessarily synonymous with disposable
earnings because of this distinction between the
deductions.
The federal CONSUMER CREDIT PROTEC-
TION ACT (15 U.S.C.A. § 1601 et seq. [1968])
establishes a minimum amount of disposable
earnings that can be garnished by a debtor’s
creditors. The lesser figure of 25 percent of a
worker’s weekly disposable earnings or the
amount by which his or her disposable earnings
exceed thirty times the maximum hourly wage is
subject to GARNISHMENT.
State laws also impose restrictions on the garnishment of debtor’s wages.
