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Your broker is wrong on both accounts.
Federal law places limits on wage garnishment amounts. While states are free to impose stricter limits, California has not done so. That means the federal law governs in California. Here are the rules:
For any given workweek, creditors are allowed to garnish the lesser of:
"Disposable earnings" are those wages left after your employer has made deductions required by law.
Example. Let's assume you earn $1,000 per week and your net wages (disposable earnings) are $700 after all required deductions. If the current federal hourly minimum wage is $7.25, multiplying it by 30 gives us $217.50. This means that your wages can be garnished up to $175 ($700 times 25%) or $482.50 ($700 minus $217.50) per week, whichever is less. As a result, your wages may be garnished up to $175 per week.
In regard to your bankruptcy question, the bankruptcy filing will automatically stay the wage garnishment order. You would need to file a notice of bankruptcy in the court which issued the wage garnishment order and would need to request an immediate order form the court staying the garnishment until the bankruptcy is resolved. Any transfer that occurs after the bankruptcy is filed must be reversed.
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I am 100% commission and get paychecks only when escrows close so it can be months between paychecks. So, max deduction is 25% correct?
Also, shouldn't my broker pay me 100% of commission if the bankruptcy is filed and I give copy of the BK filing to my broker?
The max they can take out is 25% on a wage garnishment
If you declare bankruptcy, you get the full commission and are expected to make payments pursuant to the bankruptcy plan. The bankrutpcy court may order you later on to make payments to the bankruptcy trustee, or the trustee may garnish your commissions (but that's up to the bankruptcy court and you).
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