Wage Garnishment in Maryland: What the Law Says and What Bankruptcy Changes

How much of your pay can be garnished in Maryland?

Maryland's wage attachment statute works by exempting income rather than by setting a flat deduction. Under Md. Code, Com. Law § 15-601.1, "disposable wages" are the part of wages remaining after deduction of any amount required to be withheld by law. Exempt from attachment is the greater of 75 percent of the disposable wages due, or 30 times the State minimum hourly wage in effect at the time the wages are due, multiplied by the number of weeks during which the wages due were earned. Any medical insurance payment the employer deducts from wages is exempt as well, on top of that calculation, and the amount subject to attachment is calculated per pay period.

Because the statute preserves whichever of those two figures is larger, 25 percent is a ceiling on what an ordinary judgment creditor can reach, not an automatic deduction. Federal law sets its own limit but does not displace a state rule that garnishes less (15 U.S.C. § 1677).

What do the Maryland statutes require of the creditor and your employer?

An attachment levied against a judgment debtor's wages is a lien on all attachable wages payable at service and on wages becoming payable later, until the judgment, interest and costs in the attachment are satisfied (Md. Code, Com. Law § 15-602). Any waiver of those exemption limits is void.

While the lien stands, the employer/garnishee must withhold all attachable wages and remit them to the judgment creditor or the creditor's legal representative within 15 days after the close of the last pay period in each month. If more than one attachment is served, they are satisfied in the order served, and each earlier one must be satisfied before a later one has any effect (Md. Code, Com. Law § 15-603).

Two duties fall on the creditor (Md. Code, Com. Law § 15-605). Within 15 days after the end of each month it must give the employer/garnishee and the judgment debtor a written statement of payments credited that month, unless it received no payments that month. Within 15 days after the judgment, interest and costs are satisfied, it must notify the employer/garnishee and the clerk of the court in writing.

Which income and which workers do the Maryland rules cover?

The subtitle defines "wages" as all monetary remuneration paid to an employee for employment, and "employee" includes a nonresident worker (Md. Code, Com. Law § 15-601). Because the exemption is keyed to disposable wages, amounts the law requires to be withheld come out first.

Public employment is no shelter. Wages payable by the State, a county, a municipal corporation or another political subdivision, and by their public officers, are subject to attachment for an individual's private legal obligations in the same manner and to the same extent as if the payer were a private person. That section also lets a public employer deduct and retain an additional fixed amount for each deduction, whether under this subtitle or under the federal administrative wage garnishment authority it cross-references (Md. Code, Com. Law § 15-607).

These sections govern wage attachment. They are not a complete treatment of benefit income, bank levies, tax collection or federal administrative collection, so do not infer the rules for those methods from this overview.

Which statutory protections may matter if you are contesting a garnishment?

The sources here give you several things to check, none of which replaces advice on your own case. The exemption is the greater of the two figures, plus any medical insurance payment the employer deducts, computed per pay period — arithmetic that treats 25 percent as an automatic deduction is not what Md. Code, Com. Law § 15-601.1 says. An agreement waiving those limits is void (Md. Code, Com. Law § 15-602). If you resign or are dismissed while an attachment is wholly or partly unsatisfied, the attachment lapses and no further deduction may be made unless you are reinstated or reemployed within 90 days (Md. Code, Com. Law § 15-604). An employer may not discharge an employee because wages are subjected to attachment for any one indebtedness within a calendar year, and a willful violation is a misdemeanor (Md. Code, Com. Law § 15-606). That rule addresses firing, not money that was withheld in error.

How does filing bankruptcy affect a Maryland garnishment?

A voluntary case is commenced by filing a petition with the bankruptcy court, and that filing itself constitutes an order for relief (11 U.S.C. § 301). The petition operates as a stay, applicable to all entities, of the enforcement of a prepetition judgment against the debtor or against property of the estate, and of any act to collect a prepetition claim (11 U.S.C. § 362(a)). The statute does not condition that stay on a creditor or an employer first receiving notice.

It is not universal. Subsection (b) excepts certain acts, including withholding of income that is property of the estate or property of the debtor for payment of a domestic support obligation under a judicial or administrative order or a statute (11 U.S.C. § 362(b)(2)(C)). A party in interest can also seek relief from the stay under subsection (d), and prior dismissals within the past year can cut the stay short or keep it from taking effect at all under subsections (c)(3) and (c)(4).

Which garnishments does the automatic stay not reach?

Section 362(b) lists acts the filing does not stay. The one most likely to affect a paycheck is the withholding of income that is property of the estate or property of the debtor for payment of a domestic support obligation under a judicial or administrative order or a statute, which is excepted under 11 U.S.C. § 362(b)(2)(C). Child support and alimony withholding therefore sits on a different footing from an ordinary judgment creditor's attachment. Withholding under your own agreement for certain employer-sponsored retirement plan loans is also excepted.

Separately, a party in interest can ask for relief from the stay. After notice and a hearing, the court shall grant relief — by terminating, annulling, modifying or conditioning the stay — for cause, including the lack of adequate protection of an interest in property, or on the other grounds the subsection lists (11 U.S.C. § 362(d)).

Prior dismissed cases matter too; the details are in the questions below.

If you file, which exemption list applies in Maryland?

An individual debtor may exempt the property listed in either 11 U.S.C. § 522(b)(2), the federal list in subsection (d), or § 522(b)(3). The (d) list is available unless the State law applicable to the debtor specifically does not authorize it, and Maryland has opted out (Md. Code, Cts. & Jud. Proc. § 11-504(g)). The opt-out binds a debtor whose exemptions Maryland law governs, not merely one who files here.

Opting out is not the same as having no federal exemptions. Paragraph (3)(A) still reaches property exempt under Federal law other than subsection (d), and paragraph (3)(C) separately covers retirement funds in a fund or account exempt from taxation under the Internal Revenue Code sections it lists.

Which law applies turns on domicile: where it was located for the 730 days immediately preceding the filing of the petition. If domicile was not in a single State for that period, the test is where it was located for the 180 days immediately preceding those 730 days, or for the longer portion of that 180-day period than in any other place. If that leaves the debtor ineligible for any exemption, the debtor may elect the subsection (d) property (11 U.S.C. § 522(b)).

What should you ask a lawyer about a Maryland garnishment?

This page explains the statutory limits on a Maryland wage attachment. It does not set out the procedure: what to file to object, where to file it, or the deadline. Those come from the applicable Maryland rule and from the notice served on you, so ask a lawyer to check both against your paperwork. A consultation is also where to weigh what filing would and would not change. Bring the garnishment notice and your recent pay stubs, and give the dates if your employment ended while the attachment was unsatisfied, since Md. Code, Com. Law § 15-604 turns on reinstatement or reemployment within 90 days.

• Is the withholding on my pay stub calculated the way Md. Code, Com. Law § 15-601.1 requires, per pay period, including any medical insurance deduction?
• Are there multiple attachments against me, and are they being satisfied in the order they were served?
• Has the creditor sent the monthly statement, and the satisfaction notice if the debt is paid?
• Is the debt behind this attachment one a chapter 7 or chapter 13 case would address, or is it support or a tax debt treated differently?
• Have I had a bankruptcy case dismissed in the past year, and what would that do to the stay?

Frequently asked questions

Does filing bankruptcy stop a wage garnishment in Maryland?

Filing a petition operates as a stay of, among other things, the enforcement of a judgment obtained before the case and any act to collect a prepetition claim (11 U.S.C. § 362(a)), which commonly halts an ordinary judgment garnishment. It is not universal: withholding for a domestic support obligation is excepted under § 362(b)(2)(C), a creditor may seek relief under § 362(d), and prior dismissed cases can shorten the stay or keep it from arising.

What happens to the garnishment if I quit or lose my job?

If a judgment debtor resigns or is dismissed while an attachment on wages is wholly or partly unsatisfied, the attachment lapses and no further deduction may be made — unless the debtor is reinstated or reemployed within 90 days of the resignation or dismissal (Md. Code, Com. Law § 15-604). The section sets that qualification and nothing more, so what a creditor does next is a question for a lawyer.

Can my employer fire me because my wages are garnished?

An employer may not discharge an employee because the employee's wages are subjected to attachment for any one indebtedness within a calendar year, and a willful violation is a misdemeanor punishable by a fine or imprisonment not exceeding one year, or both (Md. Code, Com. Law § 15-606). Federal law has a similar single-indebtedness rule (15 U.S.C. § 1674) and does not annul stricter state discharge rules (15 U.S.C. § 1677).

I had a bankruptcy case dismissed in the past year. What happens to the stay?

If a single or joint case is filed by or against an individual under chapter 7, 11 or 13, and a single or joint case of that debtor was pending within the preceding one-year period but was dismissed, the stay terminates as to the debtor on the 30th day after the later filing, as to any action taken with respect to a debt, property securing that debt, or a lease. A case refiled under a chapter other than chapter 7 after a dismissal under section 707(b) is excepted. A party in interest may move to extend the stay, and the court may do so only after notice and a hearing completed before the 30-day period expires, on a good-faith showing as to the creditors to be stayed (11 U.S.C. § 362(c)(3)).

What if two or more of my cases were dismissed in the past year?

If a single or joint case is filed by or against an individual under title 11 and two or more single or joint cases of that debtor were pending within the previous year but were dismissed, no stay goes into effect on the later filing; on a party in interest's request the court shall promptly confirm that. A case refiled under a chapter other than chapter 7 after a dismissal under section 707(b) is excepted. Within 30 days of the later filing a party in interest may request the stay, and after notice and a hearing the court may impose it as to any or all creditors, only on a good-faith showing as to the creditors to be stayed, effective on entry of the order (11 U.S.C. § 362(c)(4)).

Does Maryland's limit or the federal 25 percent limit apply to my paycheck?

Federal law caps ordinary garnishment at the lesser of 25 percent of disposable earnings for a workweek or the amount by which those earnings exceed 30 times the Federal minimum hourly wage (15 U.S.C. § 1673), with exceptions for support orders, chapter 13 court orders and State or Federal tax debts. It does not annul State laws providing more limited garnishment (15 U.S.C. § 1677), and Maryland's exemption uses the State minimum wage (Md. Code, Com. Law § 15-601.1).

Sources

• Md. Code, Com. Law § 15-601.1
• Md. Code, Com. Law § 15-601
• Md. Code, Com. Law § 15-602
• Md. Code, Com. Law § 15-603
• Md. Code, Com. Law § 15-604
• Md. Code, Com. Law § 15-605
• Md. Code, Com. Law § 15-606
• Md. Code, Com. Law § 15-607
• 11 U.S.C. § 301
• 11 U.S.C. § 362 · official source
• 11 U.S.C. § 522 · official source
• 15 U.S.C. § 1673
• 15 U.S.C. § 1674
• 15 U.S.C. § 1677
• Md. Code, Cts. & Jud. Proc. § 11-504(g)

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