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Which Earnings Can Be Garnished When Collecting Debt in Illinois?

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Illinois wage deduction attorney

When it comes to wage garnishment, if you are tasked with collecting debt on behalf of a bank, credit union, or finance company, seizing funds from a debtor’s paycheck through garnishment or wage deductions is often a last-resort strategy for you to use in recouping your organization’s funds. With that being said, if you are faced with the need to garnish a debtor’s paycheck or other earnings, you should know just what types of funds or income can be garnished in Illinois. 

What Can Be Garnished

In general, according to Title III of the Consumer Credit Protection Act (CCPA), a person’s earnings can be garnished to collect on debts. Per the CCPA, earnings is defined as:

  • Compensation paid for personal services

  • Compensation payable for personal services

Such compensation includes:

  • Wages from paychecks

  • Periodic payments

  • Pensions or retirement funds (excluding those from the government’s social programs like Social Security Retirement or Disability payments or state unemployment insurance)

  • Salaries

  • Commissions

  • Bonuses

Keep in mind that earnings are not just defined as periodic payments like those found in paychecks and salaries; they are also included as lump sums, such as:

  • Workers’ compensation awards

  • Termination pay

  • Profit-sharing

  • Service awards

  • Holiday pay

  • Severance pay

  • Commissions on sales

  • Nondiscretionary and discretionary bonuses

  • Bonuses for performance

  • Moving incentives

  • Merit raises

  • Referral bonuses

  • Hiring bonuses

  • Relevant/related insurance settlements

  • Payment in arrears

If you are ever uncertain as to whether the earnings you are looking to garnish qualify under the CCPA, consider this single question: Did the employer pay the amount you are considering garnishing to the employee for a service they are providing or did provide? If the answer is no, as with Social Security benefits, unemployment benefits, or even an inheritance, then you cannot garnish that money. 

As for tips, both the cash wages paid by the employer and the tips collected by the employee are considered earnings; as such, they are both subject to the wage garnishment law under the CCPA. However, note that tips above the tip credit amount or greater than the wages paid by the employer are not considered earnings according to the CCPA. 

Contact a Chicago Wage Garnishment Attorney  

If you are struggling to put a wage garnishment plan into action and need the guidance and strategies of a knowledgeable Illinois wage deduction lawyer, call us today at 312-704-0771. The highly skilled team at Dimand Walinski Law Offices, P.C., has 40 years of experience working to help protect the rights of debt collectors like you who might be struggling to enact appropriate wage garnishment actions.



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