Wage garnishment is a nasty word that often haunts anyone having trouble repaying their debts. Creditors may threaten to have your wages garnished or you may simply go unaware that it is happening until you see a part of your paycheck missing. There are a couple of important aspects to wage garnishment that you should know in order to avoid it or manage it, if it has already become a problem.
There Are Rules
Most people are unaware that the wage garnishment process is actually quite tedious for creditors. In order to garnish wages for unpaid debts, creditors must first obtain the permission of the court. This means that a creditor will have to file a lawsuit against you, prove that the debt is valid and demonstrate good faith efforts to collect on the debt through traditional means. If the creditor can meet these criteria, the judge must then approve the garnishment order.
Once a creditor obtains the court order to garnish your wages they must still follow a few procedures. First, they must provide your employer or payroll company with a copy of the order before your wages can be deducted out of your paycheck. Next, creditors are not allowed to garnish more than 25 percent of your discretionary income. Also, income and wages earned from alimony, disability, social security, or other government assistance are not eligible for garnishment.
Garnishment orders can be difficult to reverse or terminate, especially if they are garnished to satisfy back due child support or tax debts. However, filing for bankruptcy is one way to halt a garnishment order until other arrangements can be made for debt satisfaction.