Steps to Your Wages Being Garnished
What is a Wage Garnishment?
Wage garnishment is many creditors’ preferred method of collection. Creditors who have a judgment against you can get an order to garnish your wages, so a specified portion of your check will go to your creditor each pay period. The standard garnishment amount will vary depending on the type of debt. An employer may not terminate an employee for receiving a garnishment, but may terminate that employee if they receive a second garnishment within a one-year period.
Who Can Be Garnished?
Most legal adults can have their wages garnished, with a few exceptions. Both salaried and hourly employees can be garnished, including bonuses and commissions. Tips, however, generally can’t be garnished. Some income, such as social security income, is exempt from garnishment. You should speak to an attorney to confirm if your income is exempt from wage garnishment. An employee also can’t be garnished if their income doesn’t exceed 30 times the federal minimum wage.
Standard Garnishments for Different Types of Debt
- Domestic Obligations- Out of all types of debt, child support and alimony have the highest limits. If the employee financially supports a spouse or another child, their maximum garnishment will be 50%. If the employee has no other dependents, the garnishment will be 60%. An additional 5% can be added to debts that are more than 12 weeks past due. A potential 65% wage garnishment is staggeringly higher than the rest of debts.
- Student Debt- Loans from the Department of Education can be garnished at 10%.
- Federal Debts Besides Taxes- These debts can be found in the Debt Collection Improvement Act and can be garnished at 15%.
- Other Debts- The standard wage garnishment for most other debts is 25%. If it is causing an undue hardship for garnishment to continue at that rate, the employee can petition the court to reduce the garnishment. However, the lowest it can be reduced to is 15%.
State laws can vary for the standard garnishment or levy for each type of debt, but the court will always use the more favorable option for the employee between state and federal standards. You should consult an attorney as soon as possible after receiving a notice of a wage garnishment.
Wage Garnishment Steps
- Incur a debt.
- Become delinquent on your payments for that debt.
- Your creditors will step up collection attempts through phone calls, mail correspondence, emails, etc. Your creditor may also sell your debt to a debt collection agency.
- Your creditor files a lawsuit against you. You will receive a notification of the lawsuit along with a summons to appear in court. This will give you 30 days to either respond to the summons or appear on the date listed. If you don’t have any defenses, the creditor will get a judgment against you. If you try to avoid a judgment by failing to appear in court, the judge will issue a default judgment.
- If you don’t pay the balance listed on the order by the deadline, your creditor will have the judge issue a writ to garnish your wages.
- Your employer will receive a notice to garnish your wages and act in accordance with the order. The garnishment will be deducted from your next paycheck.
If your wages are being garnished, there are only a few ways to stop it. You may be able to work out a payment plan with your creditor before they have the judgment entered against you. The probability of them working out alternative arrangements with you decreases once they already have the judgment in hand. You may be able to petition the court to lower the garnishment amount on some types of debts. If possible, you can simply pay a judgment in full to avoid or stop a current wage garnishment.
Your last option to handle a wage garnishment is to file bankruptcy. When you file your bankruptcy petition, your assets and wages will be protected from your creditors by the Automatic Stay. The bankruptcy will last as long as the bankruptcy is active, and be stopped permanently if the associated debt is discharged in the bankruptcy.
Do you have more questions about your wage garnishment? Your best bet is to keep yourself as informed as possible. Call our office today to learn more about bankruptcy and how it can help you address a wage garnishment.