Wage Garnishment What Is The Law?

Wage garnishment can be a devastating blow to your financial life. Imagine having 20% - 50% of your monthly take home pay slashed all of a sudden. Would you be able to pay your mortgage, car loan, utilities, etc?

If the answer is "no," then tread lightly when it comes to tangling with your creditors.

According to the Fair Debt Collection Practices Act (FDCPA), a creditor may not threaten to jail, sue or take action to garnishment your wages unless it's lawful in your state of residence and the creditor is dead serious. Pay particular attention to the aforementioned statement.

People struggling with debt receive a barrage of phone calls from debt collectors on a regular basis. Some of these collectors make numerous insulting remarks and worse they threaten your financial livelihood. In some situations, it's not worth your creditor's time and money to pursue you in the court systems. However some zealous creditors will pursue you, if your debts are significant and get the courts to issue a wage garnishment order against you.

There are several types of wage garnishments. For example, the IRS can garnish your wages for not paying taxes, a student loan creditor and the Department of Education (DOE) can also garnish your wages for non-payment of student loans, a credit card company can garnish your wages for not paying your bills.

Wage garnishment is defined as a legal procedure through which a portion of a person's earnings is withheld for the repayment of debts. Wage garnishment is based on a person's disposable earnings," which is the amount left after legally required deductions are made.

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There are certain consumer rights and protections when it comes to wage garnishment as set forth in Title III of the Consumer Credit Protection Act. The provision limits the amount of earnings that can be garnished. It also protects the employee from being terminated as a result of the wage garnishment.

If your wage garnishment is in the form of child support you may be in for the works. By law up to 50% of disposable income can be garnished for workers supporting another spouse and child or up to 60%, if the worker is not supporting another spouse and child. An additional 5% penalty can be imposed, if the payments are made 12 weeks late.

Other permissible garnishments include the ability of federal agencies to garnish up to 15% of disposable earnings to repay defaulted debts to the federal government.

Go to our wage garnishment calculations and restrictions page for more information.