Who can garnish wages?
Several entities can garnish your wages if you have defaulted on payments.When your wages are garnished, which means that they are "attached," this indicates that a court order is in place that instructs a party, such as your employer, to either hold funds or pay your wages to someone you are in debt to.
The person who is garnishing your money is called the garnishee. When there is a court-ordered garnishment, this includes bank counts, your assets and wages.
For example, if you are behind in child support, your wages can be garnished. This approach is used quite often as a means to collect back child support that is owed. Often the payment is made to the sheriff in your county and the sheriff then makes payments or pays the entire amount to the parent or other person who is owed the child support money.
If you have defaulted on a student loan, the Department of Education can garnish your wages. The borrower will be advised 30 days in advance that this is going to occur.
The Social Security Administration can garnish benefits if it has been determined that you are delinquent regarding your federal taxes and, in some cases, if you are behind in child support payments. Generally, social security benefits are excused from garnishment; however, defaulting on your taxes or child support can result in an exception.
A total of 25 percent of your disposable earnings for a week can be garnished, according to federal law. Disposal income means the money that you have after you have paid all required taxes and national insurances. Your disposal personal income is after tax income and is about 85 percent of your income. The United States Department of Labor has wage garnishment guidelines.
Credit companies and debt collectors routinely threatened to garnish your wages but to do so they must first sue you and win the lawsuit. A court of law must impose the garnishment. The credit company cannot directly garnish your wages, as much as credit card debt collectors would like you to think so.
If you do not make your monthly credit card payments, you will receive past due statements and then delinquent notices.If you continue to ignore these notices, the credit card company can sell your debt to a third party, which is a debt collector. The credit card company sells your debt for less than what you owe, assuming the loss. This is when you start getting those incessant calls from the credit card company. If the issue is not resolved between you and the debt collecting company, the collector may choose to sell your debt to another debt collector or the collector may begin legal action against you.
If you lose the case, the court issues a judgment against your funds or income. Money is then garnished from bank deposits or payroll accounts and the creditor is paid.
After the judgment is rendered, your only recourse is to ask the court to reduce the amount that is being garnished if the reduction in your income as a result of the garnishment is so severe that it makes it impossible for you to support your dependents and yourself.
If your state has different garnishment laws from federal law, it is incumbent upon the court to adjust the garnishment to the lesser amount.
If your employer informs you that your wages are being garnished but you have not been legally served with papers, contact a lawyer. If you do not show up in court this can result in a default judgment and you will have to pay whoever has sued you. Contacting an attorney is advisable because it could be that the company or person who is attempting to garnish your wages did not follow proper procedure and the judgment may be overturned.
Laws will vary from state to state depending on garnishment procedures. Consult with an attorney about the laws specific to your state of residence.
Fair Debt Collection: Garnishment
CreditCards.com: Wage garnishment for credit card debt