Wage garnishment happens when a court asks your employer to withhold a portion of your wages to pay for any outstanding debt you may owe to someone. Once the order is passed, your employer is legally obliged to conform to it. Below, we will take a look at seven things you should know about wage garnishment.
1- Court Order Requirement
Most of your creditors will need to procure a court order in order to garnish your wages. The only exception is when you owe money in student loans, back taxes, or as alimony and child support. So, if you are behind schedule on your car payments, mortgage, personal loans, etc., the creditors will have to go to the court before they get to your employer. Generally, the court will order up to 25% of your disposable income to be garnished. The disposable income will be calculated by making the mandatory deductions to your gross income. But in case your weekly wage is higher than 30 times the legal minimum wage, then that too can be taken into consideration when calculating garnishment.
2- Student Loans
When it comes to student loans, the responsible collection agency can garnish anywhere up to 15% of your gross income in case you default on your loan repayment. And as mentioned previously, no court order will be required for this. The collection agency can just walk into your employer’s office and demand that your wages be garnished. However, before 30 days from the garnishment, the collection agency is required to notify you as to the amount you owe them, the process of entering a repayment schedule, what to do to get a copy of the loan records, and how to set up a hearing on the garnishment. This has to be in writing.
3- Back Taxes
In case you owe taxes, you should know that the IRS has the legal power to garnish a big portion of your wages without a court order. As such, you can end up with just minimal wages that will only be barely sufficient to live by. The IRS must first submit to your employer a wage levy notice. A copy will be provided to you by the employer. In addition to the IRS, your wages can also be garnished by the local and state tax agencies in case you owe taxes to them.
4- Alimony And Child Support
If you have been ordered by the court to provide child support, then your wages will automatically be garnished. The other parent only needs to send the court order to your employer to start the garnishment process. Up to 60% of your disposable wages can be garnished for child support depending on whether or not you currently have another family. As far as alimony is concerned, it does not enjoy an automatic garnishment benefit like child support does. However, if the alimony order is given by the court in conjunction with child support, then automatic garnishment will apply.
5- Preventing Wage Garnishment
In case creditors threaten wage garnishment, you should hire a good lawyer to deal with the issue. And if your wages are already being garnished at a level that makes your life miserable, then you can approach the court to reconsider the amount being garnished from the salary. Provided that you submit enough proof to support your claim, the court can adjust the garnishment so that you have enough income to live a dignified life. However, this may not be applicable to things like child support.
When your employer terminates you from your job, they are required to inform the creditors and the court of the same. And after 90 days of the termination, the garnishment also ends. However, if you get back to your job within these 90 days, the garnishment will continue to be in effect. Plus, an employer cannot fire you on the grounds that your wages are being garnished. That might invite strict legal action against the employer as they may be cited for contempt of court.
When the creditors have been paid the full debt that you owe them, they are required to file a statement in court that declares that all the dues have been paid off. In case a creditor does not do this, you can file a motion in court and get a declaration which states that the judgment has been satisfied. Also, if the court feels that the creditors have failed in their duties, then the entire garnishment procedure itself can be dismissed.