Can an MCA Funder Garnish Your Wages: Federal Limits With New York and Florida Examples

Judgment comes before garnishment. A personal guarantor’s wages can be reached, but the funder takes no shortcut to the payroll office. Federal and state limits measure what follows.

There is a particular quiet in a payroll office on a Friday afternoon, and an income execution interrupts it with paper rather than noise. The guarantor who understands the paper keeps more of the paycheck.

The Short Answer for Guarantors

Nowhere does the statute authorize garnishment before judgment. A funder with a signed guaranty and no judgment may demand payment, may threaten suit, and may file the lawsuit that starts the longer process. The funder files suit in order to convert a contract claim into a payroll claim.

The business may be closed, the account may be charged off, and the guarantor may be drawing a salary from an unrelated employer. The obligation follows the signature into the new job.

The Federal Ceiling

Federal limits on garnishment cap the garnishable part of aggregate disposable earnings for a workweek at twenty five percent or the excess over thirty times the federal minimum wage, whichever is less. For pay periods other than a week, the statute directs the Secretary of Labor to prescribe an equivalent multiple. The protection is extremely mechanical: it turns on arithmetic, not hardship.

The ceiling does not cover every debt. Support orders and Chapter 13 orders stand outside it, as do debts due for state or federal tax, and an MCA judgment, if we are being precise, belongs to none of those categories. The ordinary guarantor case takes the full protection of the cap.

No court of the United States or of any state may make, execute, or enforce an order that violates the section. Most collectors know the ceiling. They prefer the guarantor not to know it. A conversation with the collector about the levy, even casually, should pass through counsel.

New York Income Execution

New York adds its own procedure on top of the federal floor. New York income execution rules authorize installments of not more than ten percent from money the judgment debtor is receiving or will receive, within a ceiling computed like the federal one against the greater of thirty times the federal or state minimum wage. The ten percent figure is extremely visible on the form, and extremely easy to mistake for the whole law.

After the execution is delivered to the sheriff, the sheriff serves the debtor first, and only after twenty days of nonpayment or unsuccessful service does the sheriff levy on the employer, who must withhold the installments and pay them to the sheriff, while termination of employment ends the levy unless the debtor is reinstated or reemployed within ninety days.

Either side may move to modify the execution at any time, and counsel should calendar and track the return date. There are objections beyond the statutory formula, though in practice they tend to favor the prepared file. That is where counsel earns the fee.

The sheriff serves the debtor before the employer, which means the first notice arrives at home.

The statutory statement printed on the execution warns the debtor that state or federal law may permit less than ten percent (the illustrations assume a federal minimum wage figure that counsel should confirm). Most debtors first learn the formula from the sheriff’s deputy. The notice goes unread for reasons I understand.

Florida’s Different Answer

A status test, not a formula, decides the Florida answer. Florida wage exemption rules define a head of family as a natural person providing more than half the support for a child or other dependent, and exempt all disposable earnings of such a person at or below seven hundred fifty dollars a week from attachment or garnishment.

Above that line, earnings may be reached unless the debtor signed a written waiver meeting a statutory form, including a notice in fourteen point type. The paycheck stays whole. The lawsuit proceeds regardless. Resist the urge to sign a waiver of the exemption to obtain information about the balance.

For persons outside the head of family definition, the federal ceiling governs. Exempt earnings deposited in a financial institution keep the exemption for six months where the funds can be traced. The capture underlying this section reflects the 2024 statutes, and counsel should confirm the current text before relying on any figure.

The Payroll File

Before the first withholding posts, the guarantor should request and retain the pay stubs, the execution papers, and the employer correspondence showing what was withheld and when. What the file shows, or omits, decides the pace of counsel’s response. A threadbare file invites conjecture about amounts.

Simply keep every stub. Copies suffice for review. The originals stay with the tax records (one wonders how many debtors read the back of the form).

The Review Before the Levy

The payroll office follows paper, not telephone calls. A guarantor can bring the judgment and the pay records to Delancey Street for a commercial review; the company settles MCA and business debt and is not a law firm. Independent counsel tests the execution and the exemptions while the review proceeds. Counsel will review the execution, test the arithmetic, and construct a response that addresses the levy and the settlement posture. The objective is to ensure the levy amount matches what the law permits. Counsel should ensure no voluntary payment exceeds the protection the statutes provide.

Wage law draws lines with a ruler the collector would prefer to bend. The rules outside New York and Florida vary more than this article can survey. The guarantor can open that conversation without cost and without commitment.