How much can a debt collector garnish in Arizona?

What the law says

Arizona limits how much of a paycheck can be taken for a debt. Section 33-1131(B) of the Arizona Revised Statutes sets the cap for each workweek:

“may not exceed ten percent of disposable earnings for that week or the amount by which disposable earnings for that week exceed sixty times the applicable minimum hourly wage in effect at the time the earnings are payable, whichever is less”

Disposable earnings are what is left of pay after the amounts the law requires to be withheld. Under section 33-1131(A) of the Arizona Revised Statutes, pay includes wages, salary, bonuses and commissions, and payments from a pension, retirement program or deferred compensation plan.

The minimum wage in the formula is the highest one that applies, whether federal, state or local, under section 33-1131(B) of the Arizona Revised Statutes. So the cap is the smaller of two numbers: 10 percent of the week’s disposable earnings, or the amount by which those earnings exceed 60 times that hourly wage. In effect, the cap never lets garnishment bring the week’s disposable earnings below 60 times that wage.

Wage garnishment runs through a court. Under section 12-1598.10 of the Arizona Revised Statutes, it follows a judgment and a writ, the court order served on the employer. When the employer’s answer shows it owes the worker pay, and no timely objection is filed, the court orders the withheld nonexempt pay sent to the creditor, on the creditor’s application. Nonexempt pay is the part the cap allows to be taken.

That order becomes a continuing lien, a standing claim on the worker’s nonexempt earnings from then on, under section 12-1598.10(A) of the Arizona Revised Statutes.

The worker can object. The deadline for objecting is set in a section this page did not read. If an objection is filed in time, the court holds a hearing under section 12-1598.10(B) of the Arizona Revised Statutes. It decides whether the writ is valid, how much of the judgment is still owed with accruing attorney fees and costs, whether the worker was employed there, and whether pay was owed within 60 days of the writ.

A judge decides every question of fact and law, sitting without a jury, under section 12-1598.10(H) of the Arizona Revised Statutes.

What changes the answer

Support orders. The 10 percent cap does not apply to an order for the support of any person. For those orders, one-half of the worker’s disposable earnings for each pay period is protected, under section 33-1131(C) of the Arizona Revised Statutes.

Taxes and bankruptcy. The limits in section 33-1131 do not apply to a state or federal tax debt. Nor do they apply to an order of a bankruptcy court under chapter XIII of the federal bankruptcy act, in the statute’s words, under section 33-1131(D) of the Arizona Revised Statutes.

An older figure. Section 12-1598.10(F) of the Arizona Revised Statutes still speaks of a 25 percent maximum under section 33-1131(B). It lets the court, on clear and convincing evidence (a high standard of proof) of extreme economic hardship to the worker or their family, lower the amount withheld from 25 percent to not less than 15 percent. Section 33-1131(B) now sets 10 percent, and this page does not settle how the two fit together.

A repayment plan. At the hearing, the court also asks whether, when the writ was served, the debt was part of a repayment plan the worker had made with a qualified debt counseling organization. If it was, the court releases the employer from the writ instead of ordering a lien, under section 12-1598.10(C) of the Arizona Revised Statutes.

Time. If no objection is filed and no lien order is made within 45 days after the employer files its answer, the employer must release any pay it held back to the worker, under section 12-1598.10(E) of the Arizona Revised Statutes.

When the lien ends. A continuing lien stops when the judgment is paid in full, vacated, meaning set aside, or expires, or when the creditor releases it. Under section 12-1598.10(D) of the Arizona Revised Statutes, it also stops when a court with jurisdiction, including the United States bankruptcy court, stays the proceedings, meaning pauses them, or when the court orders the garnishment quashed, meaning cancelled.

The job. The lien also ends if the worker leaves the employer for more than 60 days, or earns no nonexempt pay for at least 60 days. For some school employees paid only during the school year, the period is 90 days, under section 12-1598.10(D) of the Arizona Revised Statutes.

A home. An order under section 12-1598.10 is not a lien on real property, meaning land and buildings, even if it is recorded in the public records, according to subsection G of that section of the Arizona Revised Statutes.