Garnishment of Wages

If you are not in a position to pay your bills on time, then the creditor may approach the court to solve the matter. This leads to wage garnishment, which is a process wherein there is a deduction from your paycheck to pay the defaulted dues. Garnishing wages is an efficient method for the creditor, but can have a very scourging effect on your everyday life. However, individuals likely to go through wage garnishment need not worry, as there are various federal and state laws to ensure that the process is carried out fairly. If you are in debt and are unable to pay your monthly bills, you need to consider a few aspects about wage garnishment, like wage garnishment judgment, what are the applicable laws, what kinds of funds can or cannot be garnished, restrictions as to how much a creditor is allowed to garnish, etc. To know more about wage garnishment exemptions, you first need to understand what is wage garnishment and how is it carried out.

What is Wage Garnishment?
Wage garnishment refers to a legal edict for the purpose of recouping a certain amount from the disposable income of a debtor who is not in a position to pay his dues. The deducted amount is utilized to pay back the debt. Disposable income is the money that is left after deducting income tax from a person's gross income. To prevent the misuse of wage garnishment, there is a limit set by the federal and state government to render the process fair to both sides. Since the deductions are made by the employer from the debtor's salary, the government has set a limit for the amount that can be held back. As per the federal wage garnishment law, the limit is fixed at 25 percent of the net income earned by the debtor. In a situation where the debtor does not pay federal taxes, wage garnishment may also be called forth by the Internal Revenue Service (IRS).

The procedure of garnishment of wages may be taken into consideration to pay nearly any type of debt. Nevertheless, the most common debts are child support payments, revenue enhancement, IRS debts, alimony, student loan nonpayments, and other financial liabilities. Some US states such as North Carolina, South Carolina, Pennsylvania, and Texas, don't permit wage garnishments for money which is owed to creditors. The income that depends on social security and retirement plans cannot be garnished, given that the amount is not utilized for the purpose of some investment. Furthermore, workers' compensation awards and unemployment or disability benefits can only be subject to wage garnishment if the judicial writ is for child support which is not paid. The federal law does not allow the employer to dismiss a person on account of a single wage garnishment. If the employee is subject to several garnishments, the law cannot support the employee in any way.

How Does Wage Garnishment Work?
The creditor may commence the wage garnishment process when the debtor stops paying him. Due to the nonpayment, the creditor approaches the court of law and files a case against the debtor. The wage garnishment attorney in the court issues a judgment to him against the debtor. The 'judgment' is a legal document that comprises all the details regarding the amount the debtor owes to the creditor, including the interest rates of the amount loaned, the amount repaid, the amount that remains to be repaid, etc. In some cases, the creditor might file and obtain another court order which may contain a notice demanding the debtor's presence at supplementary court proceedings. In such legal proceedings, the debtor will need to answer elaborate questions regarding his assets, earnings, bank accounts and transactions, and other property-related questions.

The creditor then obtains another court order to garnish your wages. He is required to send a notice to the debtor regarding the wage garnishment. This notice should consist of a clear statement that the garnishment has been taken into consideration, and an elaborated description of the principal exemptions from garnishment, which is the amount the creditor cannot take away. It also has to include details of the processes which he can follow to get a wage garnishment exemption. The creditor eventually obtains the garnishment order from court and takes it to the local sheriff and requests for the garnishment to be imposed. The sheriff then submits the garnishment order to the debtor's employer, prescribing the employer to deduct a certain amount from the employee's (debtor's) monthly pay. The deduction in the pay can continue until the debt is fully paid. Generally, creditors opt for wage garnishment when debtors work for an amount that exceeds the minimum hourly wage and do not already have other garnishments on the wages.

How to Get an Exemption from Wage Garnishment?
The government renders some federal wage garnishment laws which can be used by the debtor for the purpose of stopping wage garnishment or decreasing the garnished amount. In order to obtain wage garnishment exemption, debtors are required to carry out proper formalities and file the necessary paperwork with the county's clerk office. Financial disclosure assists in determining and informing the wage garnishment lawyer about the amount of disposable income that can be garnished. When it comes to serious matters such as garnishment of wages, debtors need to fill a financial disclosure form before the creditor submits the garnishment order to his employer.

After the hearing, wherein the creditor is granted a judgment against the debtor, the debtor has ten days to file a wage garnishment financial disclosure with the court's office where the 'judgment' was held. This is the first step in obtaining a wage garnishment exemption.

The debtor then needs to answer questions on financial disclosure to prove that he qualifies for wage garnishment exemptions. Debtors are also required to explain why any exemptions should be provided, along with suitable reasons. They need to explain all details regarding public assistance which they might have obtained or are receiving. Such public assistance is not subject to any wage garnishment.

If 25 percent of the debtor's disposable income is allotted to the courts for support, he is required to mark it in the box on the form. He would also be required to answer the question that asks if having 20 percent of his disposable income garnished would position him below the federal poverty level. He also needs to prepare the financial worksheet which indicates that his income is at or lower than the poverty level stated by the federal government.

Wage garnishment is not an unfair way employed by the US government to obtain tax debts from citizens. It is a systematic process which notifies the debtor beforehand about wage garnishment and the basis on which the decision was taken. Considerable knowledge of principles, rights, and processes regarding garnishment of wages and its exemptions, is of great help in dealing with wage garnishment. I hope the above article must have helped you regarding what is wage garnishment.