Who can garnish my wages?
Garnishment of your wages is typically a last resort action by a court or government agency to collect your unpaid debts. Notice is sent to your employer to withhold a certain amount from each paycheck; this money is then forward to a certain entity that is responsible for dispersing the funds to the right party.
Some of the most common reasons for garnishment include:
- Failure to pay student loans
- Child Support and Alimony
- Back taxes
- Failure to pay credit cards
- Failure to pay a personal loan
- Failure to pay medical bills
Another reason may be that you lost a lawsuit and there was a money judgment against you.
Know Your Rights! Before a credit card company, lender (other than student loans), or medical provider can have your wages garnished, they have to file a lawsuit to get a court order.
Are any of my wages protected?
With the exception of Tip Income, all other wages are subject to garnishment, including:
- Salaries
- Commissions
- Bonuses
- Hourly Wages
How much will they take?
Under Title III of the Consumer Credit Protection Act, there are laws that place restrictions on the amount that can be withheld from your pay. Employers violating these laws are subject to hefty fines and/or jail time.
As defined by Title III, only your disposable earnings can be garnished – that's the amount after taxes (not taking into account health insurance or 401k deductions or any other non-required deductions).
Know your Rights! While the Garnishment Order shows how much is to be withheld, your employer is obligated to check the calculations to ensure that garnishment limits are observed. They will receive a calculation worksheet to facilitate this.
Other garnishment limits may apply
Depending on the type of debt, other maximum garnishment limits may apply.
For example, in a monetary award resulting from a lawsuit, the judgment creditor is only entitled to garnishing 25% of your disposable income.
Additionally, if you are earning the federal minimum wage of $7.25, there are limitations that apply to that as well.
In the situation of back child support or alimony, up to 60% of your disposable income can be taken into consideration for child support and up to 50% for alimony, provided that, you don't have another child or wife to support.
Know your Rights! However, if you are more than 12 weeks (3 months) behind, the courts can order an additional 5% be added to your garnishment.
Non-tax federal debts, as defined by DCIA can garnish up to 15% of disposable earnings. These debt types are subject to federal garnishment laws but are not subject to state garnishment laws.
For defaulted federal student loans, the Department of Education agencies can garnish up to 10% of disposable earnings.
You cannot get garnishment relief for unpaid taxes or bankruptcy court orders and they are not subject to a cap on how much can be garnished.
Know your Rights! It is illegal for your employer to fire you due to any type of garnishment of only one debt. Individual state laws may offer additional protection under these circumstances.
How long do I have to pay?
Once your employer has submitted all your payments or if your employer receives a "Notice of Termination of Wage Garnishment Order" your debt is considered paid and your wages will no longer be garnished.
Understanding Garnishment Law can be challenging. With so many rules and exceptions, the experienced attorneys at The Law Offices of James C. Shields can help guide you and ensure that your wages are garnished appropriately. Contact them today for a free consultation.
