Consumer Debt and Federal Law
If you owe money to a bank, mortgage lender or credit card company, you are carrying private party consumer debt. Falling behind on payments can bring threats of legal action from the creditor, often beginning with friendly notices, continuing with unpleasant phone calls and ending with a day in court as the defendant in a civil lawsuit. A federal law known as Title III of the Consumer Credit Protection Act limits the amount of money that can be garnished from your wages: the lesser of 25 percent of your net earnings or the amount exceeding 30 times the federal minimum wage, which is $7.25 an hour, as of 2012.
South Carolina Law
The states have a constitutional right to pass their own laws regarding loans, consumer debt and other financial matters. In South Carolina, the state wage garnishment law is even more restrictive than the federal law: private lenders may not garnish wages at all for outstanding consumer debt, installment loans and the like. The law even applies to judgments won in the state's courts. But, if a resident of South Carolina moved from another state in which there is a valid judgment against him, South Carolina law allows wage garnishment to satisfy that judgment.
Public Agency Debts
South Carolina permits wage garnishment by certain public agencies, including the Internal Revenue Service which may garnish your wages for unpaid taxes. The state also allows anyone attempting to collect on a federally guaranteed student loan to garnish wages, and note that student loans are not dischargeable in bankruptcy. Child support agencies in South Carolina as well as other states can enforce overdue child support payments through wage garnishment. By the Consumer Credit Protection Act, child support garnishments can amount to 65 percent of disposable income if the non-paying parent is over 12 weeks in arrears; 60 percent if less than 12 weeks. If the non-paying parent has a second family to support, these percentages fall to 55 and 50, respectively
Employers and Garnishment
Of course, even the threat of wage garnishment is an unpleasant experience for both employee and employer. If you hear a wrongful or untruthful statement from a debt collector regarding wage garnishment, you can take legal action for violation of federal and state laws regarding collections. South Carolina law bars employers from terminating employees for garnishment, and a similar federal law protects anyone subject to a single wage garnishment -- although not multiple garnishments -- from termination.