What Is Wage Garnishment?
Getting paid may be the best part of a job, but if you owe money, you could be in for an unpleasant surprise on payday.
In fact, millions of U.S. workers lose earnings to wage garnishment, which lets creditors legally seize pay to satisfy debts. If you're affected, here’s what you should know.
Wage garnishment is the legal seizure of a portion of a worker’s earnings to pay debts such as:
- Child support
- Consumer debt
- Federal student loans
- Unpaid federal and state taxes
Wage garnishment typically occurs when payments on a debt are at least six months overdue and the debtor hasn't made arrangements to repay. Creditors who seek to garnish wages have likely exhausted all other paths to recovery.
Garnishment begins after the creditor has won a legal judgment affirming their entitlement to the money. Federal agencies collecting money may proceed without a court order.
If your wages are garnished, you’ll receive a legal notice, which includes the nature and amount of the debt. Meanwhile, A Writ of Garnishment is served to your employer, ordering them to withhold a percentage of your earnings. These garnished wages are paid directly to the creditor.
Title III of the Consumer Credit Protection Act limits the maximum amount of garnishment in a pay period. Typically, a creditor may not garnish more than 25% of a worker’s disposable earnings, which is what’s left after legal deductions. However, when pay is garnished for child support, as much as 60% may be withheld. In an IRS garnishment, the amount of pay a worker keeps depends on the tax exemptions they claim.
Garnishments continue until the debt is paid off or the debtor makes satisfactory payment arrangements.
Workers may file a dispute if they believe an error has been made, or to object to a garnishment that prevents them from paying for necessities. The notice of garnishment contains instructions for filing such a dispute.
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