What Is the Head of Household Exemption?
Florida Statutes provide an exemption from garnishment of earnings payable to a head of household, whether denominated as wages, salary, commission, or bonus. A debtor must provide more than half of the financial support for another person to whom he has either a legal or moral obligation of support in order to qualify as head of household.
The supported person may be a child or an adult, and the supported person does not need to physically reside in the debtor’s homestead.
Can Both Spouses Be Head of Household?
When a husband and wife have a joint judgment debtor, only one of the spouses can be head-of-household. It is not enough, for instance, that a debtor earns more than his dependent spouse. The debtor must earn enough money from all sources that the debtor is the dependent’s primary source of support after considering the dependent’s income from all sources. Courts will also consider non-financial factors including evidence of which spouse is primarily in charge of financial decisions.
There is no dollar limit to Florida’s head of household exemption. The debtor who qualifies as a head of household may exempt unlimited amounts of earnings from garnishment.
Waiver of Head of Household Exemption.
A debtor may waive his head-of-household exemption from a Florida wage garnishment. There are statutory provisions to protect consumers against making inadvertent, unwitting waivers. The law does not permit creditors to bury head of household waivers in fine print within complicated loan documents.
Waivers must be in a separate document attached to the debt agreement and must be presented in at least 14 point font. The waiver must clearly describe the wage garnishment exemption.
Many creditors will attempt to include written waivers in their stack of credit documents. Be careful not to inadvertently waive your wage garnishment exemptions by signing a waiver form.
There is no established procedure for debtors to claim or assert head-of-household exemption before of a wage garnishment is issued. Filing a declaration of head of household in a court proceeding will not prevent a creditor from obtaining a writ of wage garnishment.
A garnished debtor asserts a head-of-household exemption in response to the judgment creditor’s wage garnishment writ. The garnished debtor can either file a claim of exemption with the court, or the debtor can file a motion to dissolve the wage garnishment and assert the exemption in the motion.
Can you be Self-Employed and Head of Household?
When a judgment debtor is his own employer and controls the amount and timing of payments, many courts have ruled that payments from the debtor’s own company do not constitute “earnings” within the wage garnishment statutory exemption. In some court cases, the debtor’s company paid the debtor varying amounts of “salary” using different pay periods based upon the business’s profitability. Also, courts have found that the lack of a written employment agreement to prevent a debtor from claiming head of household with his own company.
Nevertheless, there are ways to organize a business that pays the owner with money not subject to continuing wage garnishment. Self-employed debtors should consult an experienced attorney in order to protect their business compensation.
If you’ve been served with a writ of garnishment and want advice on how to handle it, give us a call to schedule an appointment.