Wage garnishment is a procedure to obtain payment for a debt incurred by a debtor and is an equitable and legal process. Garnishments are obtained by a court order and are not the same as a voluntary method whereas you submit funds to an employer for payments to a creditor.
The amount of the garnishment depends on disposable earnings, which is the money left after required deductions are processed. These include state, local, and federal taxes. Also included are the withholdings required by law for employee retirement systems.
The maximum amounts are set for what can be garnished for a specific pay period, no matter how many garnishments are received by the employer. For regular garnishments, the amount taken may not exceed the lesser of these two figures:
- The amount of disposable earnings are greater than 30 times the federal minimum wage ($7.25 x 30) for example
- 25% of the employee's disposable earnings
Garnishment restrictions don't apply to certain debts due for federal or state taxes, or certain bankruptcy court orders.
Alimony or Child Support
Special restrictions apply to court orders involving alimony and child support. Up to 50% of disposable earnings can be held if the worker is supporting another child or spouse, up to 60% if not. If payments are more than 12 weeks in arrears, an additional 5% may be garnished.
You can be garnished up to 15% if you become default on a student loan. You must be notified a minimum of 30 days before the garnishment is set to begin. The information will include:
- How to enter a repayment schedule
- How much you owe
- How to receive a copy of the loan records
- How to request a hearing
- Back Taxes
An agency does not have to receive a court order; beware! It will depend on the standard deduction amount and how many dependents you claim. You will receive a minimum check with the balance submitted to the IRS.
A wage levy notice will be submitted to the employer and you will receive a copy. You must complete and send the exemption claim form and return it to the employer. You should contact your state labor department for more information.
This is a brief outline of what rights you have about wage garnishment and the laws concerning the process. As you now see, it is a process that can and will have an effect on you and your family. It is always best to pursue all other choices you have before it gets to the judgment stage or garnishment procedures.
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