What are Disposal Earnings?
Disposal earnings are income that a company receives when an asset or liability is sold below the book value.
Disposal earnings are the opposite of book value, which is the value that an asset would have if it were bought at market value and sold at the market price.
Although an employee savings plan, pension plan, life insurance, and medical insurance are not required by law, they are still deducted from your disposable earnings. This distinction between different types of deductions means that your disposable earnings and take-home pay are not necessarily the same.
Disposable Earnings for Garnishments:
Disposable earnings are earnings that an individual or a business can set aside in a bank account. Disposable earnings can include cash, checks, and money that is not invested. When an individual or business uses disposable earnings to pay a debt, the debt is considered satisfied.
Disposable earnings include wages or salary, interest, dividends, and any other money that is received on a regular basis. Disposable earnings are ultimately the money that an individual or business has available for spending.
Why are disposal earnings necessary?
They provide the funds that a business needs to invest in new projects, expand its operations, and pay its bills. Disposal earnings also help businesses build up their cash reserves, which can provide a cushion against unexpected expenses or downturns in the economy.