Owing money to creditors is not a position anyone wants to be in, especially once collection efforts are initiated. Debt collection can range from a simple phone call to wage garnishment, the latter being a more difficult action to resolve. Luckily, there are limits and rules to wage garnishment that can influence the way a garnishment order is handled.
Reasons for Garnishment
Not all debts warrant wage garnishment and many creditors are unable to use such action as a tool for collection. The most common debts that can result in wage garnishment are back due child support payments, tax debts, student loan debts and other unpaid court fines. It is quite rare for a credit card or medical debt creditors to implement a garnishment order. The reason is that the wage garnishment process requires that the creditor obtain a court order first.
The Garnishment Process
The creditor is required to file a claim against the debtor and demonstrate to the court that good faith efforts have been made towards collecting on the debt before the court will approve the order. Once the order is granted, creditors can only take the lesser of (a) 25% of a debtors gross monthly income or (b) 30 times the federal minimum wage per month.
Once a wage garnishment order is issued, it can be difficult to stop. Because the order is issued by the court, the debtor must use legal avenues to get the garnishment order lifted or satisfy the debt. One option to stop wage garnishment is bankruptcy, which can immediately halt all garnishments while the debtor works to resolve their debts.