Many states follow the federal method of calculating the amount of a garnishment. This approach garnishes the lesser amount of a percentage of the employee's disposable wages or the amount by which an employee's wages exceed a certain number of times the minimum wage. Iowa does not follow that standard. While it has a similar formula, it provides annual caps on garnishments that affect how much one creditor can take at a time.
After a creditor receives a judgment against a debtor, it can file an application for a writ of garnishment with the court that gave the judgment. The creditor specifies the type of property that it wants garnished, such as wages, and supplies information about who is in control of the property. The application must be submitted with the application fee due for the writ. After that, the writ is served on the employer and the defendant.
Iowa allows a creditor to take a maximum of 25 percent of a debtor's disposable wages for the week or the amount over 40 times the federal minimum wage, whichever is less. For example, if the debtor had disposable wages of $350, 25 percent of this amount would be $87.50. The amount that exceeds 40 times the federal minimum wage of $7.25 would be $60, so the creditor could take a maximum of $60.
In addition to the general formula, Iowa caps the amount for how much any particular creditor can garnish within a year. This is based on how much an individual earns. For example, for an employee with an annual income of $11,999 or less, up to $250 can be garnished. Employees with annual incomes between $12,000 and $15,999 can have their wages garnished by up to $400. For incomes between $16,000 and $23,999, a maximum garnishment amount of $800 is permitted. The maximum garnishment amount for the year for incomes up to $34,999 is $1,500 and the maximum annual garnishment amount for individuals with an annual income of up to $49,999 is $2,000. For individuals with annual incomes of $50,000 or more, up to 10 percent of expected earnings can be garnished.
Child Support Debt
Iowa's process is different for child support debt. The Child Support Recovery Unit sends a separate order to the employer that instructs it to withhold a specific amount for child support. It also sends the order to the debtor. Employers are instructed to withhold payments directly from the employee's income immediately. Parents do not have to be behind on child support in order for the order to be issued or effective. After an employer receives this order, it has ten days to process the paperwork and must then withhold funds from the next paycheck.