Your wage can be garnished in case you owe student loans, back taxes, and child support or a court judgment has been entered against you. If you lose a lawsuit, receiving money judgment, the entity or person that won the lawsuit can then garnish your wages. Apart from the mentioned instances when your wage can be garnished, most of the creditors need to move a court order and get permit to garnish your wages.
The Process of Wage Garnishment
A copy of the court order is provided to the local marshal or sheriff, who sends it to your employer. The employer holds back a certain amount of your paycheck, and sends it directly to institution or person to whom you owe the money, up to the payment of debt in full.
Mostly, the amount of wage garnished is limited to the amount by which weekly wages exceed 30 times your minimum wage or 25 percent of disposable earnings, whichever is lower. However, some states have a lower percentage limit set for wage garnishment.
How to Protest a Wage Garnishment?
You have to file papers with the court and receive a hearing date. Your attorney can present evidences favouring that you need exemption on the percentage amount of wage garnished or require more of your paycheck to fulfil expenses.
What are the 3 Types of Wage Garnishments?
1. Wage Garnishments for Child Support and Alimony: In case you have to pay for child support, then the other parent of the child or the court sends the copy of wage garnishment order to your employer. The garnished amount will be sent to the other parent. The amount taken can be as much as 50% of your disposable income, especially if you support a child or a spouse who is not the subject of the order.
If you maintain health insurance coverage of your child, your wage will find deduction for that asked amount. If you do not support a child or spouse, up to 60% of your wage can be taken and 5% additional is garnished if you are more than 12 weeks in arrears. If the alimony and child support are combined into support payment by one family, the wage withholding is applied to the whole amount owed.
2. Wage Garnishments for Student Loans: Your wage can be garnished up to 15% in case you default in paying back for a student loan. The wage garnished can be claimed by the U.S. Department of Education or the agency trying to collect the outstanding dues on its behalf.
At least 30 days prior to your wage garnishment, you must be notified in writing of the amount you owe, copy of loan related records, procedure of entering into a voluntary repayment routine, and ways to request a hearing on the garnishment.
3. Wage Garnishments for Back Taxes: IRS will send the wage levy notice to your employer. The amount taken depends on the standard deduction amount and the number of dependents you have. Your employer will send the maximum amount to IRS and a minimum amount to you every week.
Local and state tax agencies can also take a chunk of your wages. In some states, law limits as to how much of wage can be garnished when you default in paying taxes.
Consulting an attorney can help you understand the term, its types, and how to protest for it more effectively.