Michigan lawmakers are considering another significant change to the state’s garnishment laws. Introduced on July 3, 2026, House Bill (HB) 6205 would amend the Revised Judicature Act to expand and clarify categories of income that are exempt from garnishment while also modifying the amount of wages that may be withheld from a consumer’s earnings. The bill is currently pending before the House Committee on Finance.
One of the bill’s key provisions would add new Section 4032 to expressly exempt several types of benefits and credits from garnishment. Specifically, HB 6205 would clarify that means-tested public assistance benefits, unemployment compensation benefits, federal and state earned income tax credits, disability benefits, and workers’ disability compensation benefits are not subject to garnishment. By expressly identifying these sources of income, the legislation seeks to provide greater certainty regarding funds that are intended to support individuals and families facing financial hardship.
HB 6205 would also create a new wage garnishment framework under proposed Section 4033. Under current law, creditors generally may garnish up to 25% of a debtor’s disposable earnings. The proposed legislation would instead establish a tiered approach based on weekly income. For individuals earning less than $1,925 per week (approximately $100,100 annually), garnishment would be limited to 20% of garnishable earnings, subject to existing federal minimum wage protections. Conversely, individuals earning more than $1,925 per week would be subject to a higher garnishment cap of 30% of garnishable earnings. However, Federal consumer protection laws limit the amount subject to garnishment to 25% of disposable income. If enacted, the bill would reduce withholding for many low to middle-income consumers.
Our team is constantly monitoring this topic. If you have any questions or would like to learn more about Weltman’s Solutions, feel free to connect with Detroit Shareholder Dan Best at any time.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
One of the bill’s key provisions would add new Section 4032 to expressly exempt several types of benefits and credits from garnishment. Specifically, HB 6205 would clarify that means-tested public assistance benefits, unemployment compensation benefits, federal and state earned income tax credits, disability benefits, and workers’ disability compensation benefits are not subject to garnishment. By expressly identifying these sources of income, the legislation seeks to provide greater certainty regarding funds that are intended to support individuals and families facing financial hardship.
HB 6205 would also create a new wage garnishment framework under proposed Section 4033. Under current law, creditors generally may garnish up to 25% of a debtor’s disposable earnings. The proposed legislation would instead establish a tiered approach based on weekly income. For individuals earning less than $1,925 per week (approximately $100,100 annually), garnishment would be limited to 20% of garnishable earnings, subject to existing federal minimum wage protections. Conversely, individuals earning more than $1,925 per week would be subject to a higher garnishment cap of 30% of garnishable earnings. However, Federal consumer protection laws limit the amount subject to garnishment to 25% of disposable income. If enacted, the bill would reduce withholding for many low to middle-income consumers.
Our team is constantly monitoring this topic. If you have any questions or would like to learn more about Weltman’s Solutions, feel free to connect with Detroit Shareholder Dan Best at any time.
This blog is not a solicitation for business, and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.
