How Income Garnishment Works

Income or wage garnishment; some people tremble at the phrase, and rightly so. Sometimes income garnishment can be a thoroughly unpleasant reality for many different people. A one-time slip-up such as the failure to pay taxes, accidentally overlooking some bills, or skipping out on child support, and all of a sudden the extremely appreciated and much desired big (or even small) paycheck has suddenly disappointingly and significantly shrunk. This is associated with one major issue, someone -whether it’s Uncle Bob, a creditor, or the state governor- has collected the person’s wages, and now there’s seemingly nothing they can do about it.

However, income garnishment is not created to be extreme. For instance, the procedure does not take all of an individual’s earnings. Rather, it only claims some portion of it in order for the employer to satisfy the debt. Besides that, the money is taken before the individual receives it as a pay check, so it is technically not considered like a scheme to bring misfortune. But it certainly does affect the person quite a lot.

Of course, income garnishment is not a positive event, but it should not come as a surprise to the individual or catch them completely off-guard. Garnishment, after all, is the last option after all other selections of satisfying someone’s debt are exhausted. Thus, it requires a court order, and though this may not be an expected happening, employers are normally supposed to notify the worker of a wage garnishment prior to its taking full effect.

One of the most common reasons for income garnishment is tax debt. When someone has had their wage garnished and they have a pile of ten unopened letters from the Internal Revenue Service lying on their desks, well, whose fault is that? After all, these letters are obviously notices demanding either payment, or a reasonable explanation to why the taxes had not been paid. Besides typical earnings, government creditors can also garnish any kind of Social Security or veteran’s benefits- not fully, but applicably.

Outrageous as that may sound, there are, fortunately, some garnishment limits. For example, according to Bankrate, Inc., Title III of the Consumer Credit Protection Act  exists to cap the amount of money that can be taken, which is usually 25 percent of the employee’s disposable earnings, or else the specific amount by which an employee’s disposable payment for a week of work is larger than 30 times the federal official minimum wage.