Aggregate disposable earnings refer to the amount of a person's income that can be subjected to a wage garnishment order by a court of law. The amount of a person's income that classifies as aggregate disposable earnings differs depending on a few possible factors such as certain other debts owed or whether a person supports a child or spouse.
Disposable Income Defined
Disposable income does not constitute the amount of money a person has left over after he pays all of his debts, despite how some may use the term in day-to-day language. Legally, a person's disposable income totals the amount a person is paid by his employer, minus any local, state or Federal taxes taken out of the person's earnings. A person pays expenses such as housing, food and insurance from his disposable income.
When a person owes a debt that he has not paid, a creditor may choose to sue and obtain a judgment in court. With a judgment, the creditor has the ability to garnish a person's wages, meaning a portion of the debtor's income is withheld and turned over to the creditor until the debt has been satisfied. An employer cannot legally fire an employee for garnishments relating to a single debt.
Maximum Garnishment Amount
Federal law allows a portion of a person's wages to be protected from wage garnishment. The maximum amount of a person's wages that can be legally garnished equals 25 percent of a person's disposable earnings for a pay period or, for a week-long pay period, the amount of earnings that exceed the current Federal minimum wage multiplied by 30, whichever amount is smallest.
Exceptions to Garnishments
Under certain circumstances, an individual may benefit from some exceptions to the regular maximum allowed garnishment amounts. If the individual pays child support or alimony that has been ordered by a court of law, the amount of the child support or alimony is exempt from garnishments. Court orders relating to filed chapter 13 bankruptcy supersede any wage garnishment orders. Also, if the debtor owes Federal or state taxes, a garnishment may not claim money designated for settling the tax debt. If the debtor supports a child or spouse, then the maximum aggregate disposable income that can be subject to a garnishment equals 50 percent of the debtor's disposable income