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PAG LIN 1 1 Section 1. Section 537.5105, subsection 2, unnumbered 1 2 paragraph 1, Code 1997, is amended to read as follows: 1 3In addition to the provisions ofNotwithstanding section 1 4 642.21, the maximum part of the aggregate disposable earnings 1 5 of an individual for any workweek which is subjected to 1 6 garnishment to enforce payment of a judgment arising from a 1 7 consumer credit transaction may not exceed the lesser of 1 8 twenty-five percent of the individual's disposable earnings 1 9 for that week, or the amount by which the individual's 1 10 disposable earnings for that week exceed forty times the 1 11 federal minimum hourly wage prescribed by the Fair Labor 1 12 Standards Act of 1938, United States Code, title 29, section 1 13 206, subsection "a," paragraph (1), in effect at the time the 1 14 earnings are payable. 1 15 Sec. 2. Section 627.6, subsection 9, paragraph c, Code 1 16 1997, is amended to read as follows: 1 17 c. In the event of a bankruptcy proceeding, the debtor's 1 18 interest in accrued wages and in state and federal tax refunds 1 19 as of the date of filing of the petition in bankruptcy, not to 1 20 exceed one thousand dollars in the aggregate, notwithstanding 1 21 section 642.21. This exemption is in addition to the 1 22 limitations contained insections 642.21 andsection 537.5105. 1 23 Sec. 3. Section 630.3A, Code 1997, is amended to read as 1 24 follows: 1 25 630.3A HEARING TO DETERMINE JUDGMENT DEBTOR'S INCOME. 1 26 At any time after the rendition of judgment the court, upon 1 27 application of the judgment creditor or the judgment debtor 1 28 and upon notice to the adverse party as the court shall 1 29 direct, shall conduct a hearing to determine the reasonably 1 30 expected annual earnings of the judgment debtor for the 1 31 current calendar year and the applicablelimitation uponrate 1 32 of garnishment as provided in section 642.21. The court shall 1 33 also consider in the interest of justice whether a greater 1 34 amount than provided in section 642.21 shall be exempt from 1 35 garnishment. In making the determination the court shall 2 1 consider the age, number and circumstances of the dependents 2 2 of the debtor, existing federal poverty level guidelines, the 2 3 debtor's maintenance and support needs, the debtor's other 2 4 financial obligations and any other relevant information. An 2 5 order reducing the garnishment may be modified or vacated upon 2 6 the application of a party to the court, notice to the adverse 2 7 party, and a showing at a hearing of changed circumstances. 2 8 An additional filing fee shall not be assessed for proceedings 2 9 under this section. 2 10 Sec. 4. Section 642.21, subsection 1, Code 1997, is 2 11 amended to read as follows: 2 12 1. The disposable earnings of an individual are exempt 2 13 from garnishment to the extent provided by the federal 2 14 Consumer Credit Protection Act, Title III, 15 U.S.C. secs. 2 15 1671–1677 (1982).The maximum amount of an employee's2 16earnings which may be garnished during any one calendar year2 17is two hundred fifty dollars for each judgment creditor,2 18except as provided in chapter 252D and sections 598.22,2 19598.23, and 627.12, or when those earnings are reasonably2 20expected to be in excess of twelve thousand dollars for that2 21calendar year as determined from the answers taken by the2 22sheriff or by the court pursuant to section 642.5, subsection2 234. When the employee's earnings are reasonably expected to be2 24more than twelve thousand dollars the maximum amount of those2 25earnings which may be garnished during a calendar year for2 26each creditor is as follows:Except as otherwise provided in 2 27 chapter 252D, sections 537.5105, 598.22, 598.23, 627.12, and 2 28 this section, the rate at which the garnishee shall withhold 2 29 from the earnings of the employee shall be equivalent to the 2 30 rate at which the judgment debtor's debt accumulated against 2 31 each judgment creditor, as determined and ordered by a court 2 32 of law or equity. 2 33a. Employees with expected earnings of twelve thousand2 34dollars or more, but less than sixteen thousand dollars, not2 35more than four hundred dollars may be garnished.3 1b. Employees with expected earnings of sixteen thousand3 2dollars or more, but less than twenty-four thousand dollars,3 3not more than eight hundred dollars may be garnished.3 4c. Employees with expected earnings of twenty-four3 5thousand dollars or more, but less than thirty-five thousand3 6dollars, not more than one thousand five hundred dollars may3 7be garnished.3 8d. Employees with expected earnings of thirty-five3 9thousand dollars or more, but less than fifty thousand3 10dollars, not more than two thousand dollars may be garnished.3 11e. Employees with expected earnings of fifty thousand3 12dollars or more, not more than ten percent of an employee's3 13expected earnings.3 14 Sec. 5. Section 642.22, subsection 1, paragraph a, Code 3 15 1997, is amended by striking the paragraph. 3 16 EXPLANATION 3 17 This bill strikes several provisions limiting the maximum 3 18 amount of an employee's earnings which may be garnisheed 3 19 during a calendar year, and provides that, except as provided 3 20 in laws relating to child support and the consumer credit code 3 21 under the uniform commercial code, the rate at which the 3 22 garnishee shall withhold from the earnings of the employee 3 23 shall be equal to the rate at which the debt accumulated, as 3 24 determined and ordered by a court of law or equity. 3 25 Currently, the maximum amount that may be garnisheed 3 26 annually from an employee's earnings for each judgment 3 27 creditor are set forth in the Code as follows: (1) $250 for 3 28 those earning less than $12,000; (2) $400 for those earning 3 29 between $12,000 and $16,000; (3) $800 for those earning 3 30 between $16,000 and $24,000; (4) $1,500 for those earning 3 31 between $24,000 and $35,000; (5) $2,000 for those earning 3 32 between $35,000 and $50,000; and (6) 10 percent of earnings 3 33 for those earning $50,000 or more. 3 34 However, under the Code, the disposable earnings of an 3 35 individual are exempt from garnishment to the extent provided 4 1 by the federal Consumer Credit Protection Act. 4 2 The bill notwithstands the provision establishing that the 4 3 rate of withholding from the earnings of the employee shall be 4 4 equal to the rate at which the debt accumulated, to maintain a 4 5 provision in the Iowa consumer credit code that establishes 4 6 maximum limitations on the garnishment of earnings of an 4 7 individual resulting from a judgment arising from a consumer 4 8 credit transaction, and a provision that permits a debtor in a 4 9 bankruptcy hearing to hold exempt from execution not more than 4 10 $1,000 in interest in accrued wages and in state and federal 4 11 tax refunds. 4 12 Because the provisions limiting the amounts garnisheed to 4 13 an annual maximum based upon the expected annual earnings of 4 14 an employee are eliminated under the bill, the bill also 4 15 eliminates a provision establishing that a notice of 4 16 garnishment served upon a garnishee is effective until the 4 17 annual maximum amount has been reached. 4 18 LSB 1584HH 77 4 19 kh/sc/14.1
Text: HF00511 Text: HF00513 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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