Wage Garnishment – What You Need to Know

If you’ve come into contact with a wage garnishment, you know it’s a very unpleasant thing. If you haven’t, you’ll want to know it is.

Everyone should have an awareness of what it is, and that’s why we wanted to allocate an entire article for this critical concept.

What is Wage Garnishment?

Simply put, wage garnishment is a court judgment which mandates that a portion of your income will be used to resolve a debt you have.

As it’s a court order, there’s nothing that you can do about it. The court determines that your employer needs to divert a part of your paycheck to a person or institution which you owe money.

That means that wage garnishment can happen for a wide variety of reasons like consumer debts, tax liens, student loans, child support, and more. If that specific debt is past due, you can’t pay it, but you have to, a court can mandate that a portion of your salary is used to repay the debt.

It might sound that wage garnishment can leave you broke for an entire month, but thankfully, the reality is much different. You are within your rights to make caps on how much is taken, meaning that you can determine precisely how much of your salary will allocate for debt repayment, and from how many paychecks.

Wage garnishments usually occur as a result of a lawsuit that goes into favor of your creditor, but sometimes, a creditor can even make this happen without a court order.

Whatever the case may be, you will be notified, and your garnishment will commence in five to 30 days. It lasts until your debt (plus court fees and interest, if included) is paid.

Additionally, laws exist that limit the amount of monthly wage garnishment. That means that no creditor can take more than a specific federal limit for each type of debt. That limit is always lower than the percentage that’s counted as disposable income – the amount left after taxes and all other necessary deductions from your paycheck. The portion that goes as wage garnishment is thus less than 25%, in most cases only up to 15%, but if the debt in question is child support and alimony, the number is up to 60%.

What Can You Do About a Wage Garnishment?

You have several options when you face a wage garnishment:

  • Always start by checking that everything is in order as it might be about something you have already paid.
  • Try to work out a different deal if the garnishment is too much of a financial burden.
  • Challenge the decision as there’s always a possibility that you can win such a dispute. You have to act quickly though.
  • Accept the judgment and start repaying your debt.

If you would still like to know more about wage garnishments, how they operate in greater detail, and what to do to avoid them, feel free to contact us at Golden Tax Relief.

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