Income garnishment or wage garnishment is the process in which a debt collector or a creditor obtains a court’s permission to withhold part of the wages or tax refunds received by one of its consumers. The reason for obtaining such permission is that the consumer failed to fulfill his or her obligation with regard to paying dues on time, or failed to fulfill these obligations in full. However, consumers do have federal protection with regard to the amount of garnishment that can take place with each paycheck, and the length of time for which such garnishments can take place. Thus, this article will describe the process of income garnishment and the rights of a consumer who has been subjected to such garnishments.
The process of income garnishment
In most instances, creditors or debt collectors obtain permission from the courts to make use of consumer’s personal earnings to repay the debt. However, if the organization seeking income garnishment is a federal agency or the Inland Revenue Services because of owing non-tax debt, there is no need for obtaining a court order as with private debt collectors and creditors.
Following obtaining writ of garnishment, debt collectors and creditors will inform the employer, as well as the consumer with regard to the placement of an income garnishment on the consumer’s earnings along with the amount of garnishment, and the length for which such garnishment will take place. The notice will also include the consumers’ rights with regard to the garnishment. Thus, after receiving the notice, the employer will take steps to deduct the said amount each month from its employee’s paycheck. However, the employee can appeal using a special form against the garnishment or towards its inappropriateness.
Restrictions on wage garnishment
Given the fact that, debt collectors and creditors may try to take undue advantage of wage garnishment in hope of making the person repay the debt quickly, Federal and State laws curtails the amount of garnishment that can take place, and the length for which garnishment can take place. In order to calculate the amount of garnishment, the authorities make use of the person’s disposable income, which is the amount of income left after deducting legally required deductions such as federal and state tax, social security, and unemployment insurance deductions.
According to Federal laws, the ordinary weekly wage garnishment cannot exceed the lesser of either, “25 percent of your disposable income, or the amount by which your disposable income is greater than 30 times the federal minimum wage.” With regard to child support and alimony, up to 50 percent of the disposable earnings can be garnished if the person supports another spouse or if not; up to 60 percent can be garnished from the wage. Furthermore, there are rules with regard to garnishing an already garnished income as well.
Additionally, state laws could provide for wage garnishments, although most states absorb the same federal laws as the state garnishment law.