After a creditor proves in court that debtor owes it money and receives a judgment to that effect, the creditor can go after the employee's wages. This method helps ensure that the creditor can recoup the money owed to it. However, there are several limitations on how much money the creditor can receive each paycheck. The employer is responsible for ensuring that the withholding is not greater than the law provides.
In order for a creditor to garnish an employee's wages, the employee must have income that is greater than 45 times the Illinois minimum wage or the federal minimum wage, whichever is greater. In 2015, the federal minimum wage was set at $7.25 per hour while the Illinois minimum wage was $8.25 per hour. Therefore, an employee must have earned more than $371.25 ($8.25 * 45) in weekly net pay before his wages could be garnished in 2015.
Provided that the employee meets the minimum income threshold, the amount that can be garnished is equal to 15 percent of the employee's gross wages or the amount of the employee's net wages that exceed the minimum income noted above, whichever is lower. Therefore, if the employee had a gross income of $500 and a net income of $400, 15 percent of her gross income would be $75. The difference in the net income and the exempted amount would be $28.75 ($400 - $371.25). Therefore, the creditor could only take the $28.75 each week, because that is the lesser calculation.
In any case, the maximum amount of wages that can be deducted is either 15 percent of gross wages or the difference between 45 times the federal or state minimum wage and the amount of net pay, whichever is lower. For child support garnishments, the employer can withhold up to 65 percent of the net wages if the employee has no other dependents and is over 12 weeks in arrears.
If a second creditor wishes to garnish an employee's paycheck, it cannot do so until the existing garnishment is paid off. Additionally, an employee's wages cannot be garnished if they are subject to an existing court order for child support.
The garnishment should stop when the debt has been fully repaid. The garnishment can expire, but the creditor can go back and renew it if necessary. Filing Chapter 7 or Chapter 13 bankruptcy will create a stay on the garnishment.