Wage garnishment is a way of getting a judgment that has financial benefits and base against a defendant by ordering a third party (the garnishee) to pay money, which otherwise would have gone to the defendant, directly to the plaintiff.
In plain terms, if you were not able to pay the bill, the person or organization whom you owe it to would file a suit against you, and try to get it directly out of your salary; in extreme cases, if the court of Justice allows, he/it can also sell your property to get the same.
Up to around twenty five percent of your disposable income can be taken away, not more than that, according to the Federal Law. It can be due to any kind of debt that you must have taken; commonly, it is unpaid taxes, unpaid court fines, or any other debts taken as a part of child support.
What do Wage Garnishment Laws Include?
☛ The law is applicable as stated earlier to debts taken from banks; student loans and unpaid money owed to the government, but does not illustrate a way to stop wage garnishment. Yet, the most effective way to save yourself is to be proactive, when dealing with creditors and debt collectors so that they know that you are willing to pay.
☛ An employer cannot terminate the employee, on the basis of the fact that his wage is being garnished. In fact, if an organization does this and it is proved, they can be fined (though not more than USD 1000), or can also be imprisoned for not more than a year.
☛ The Social Security check, Public Benefits check, and Retirement Benefits check cannot be subjected to garnishment, according to the federal and state courts.
☛ There are some federal and state laws that can be used to stop, start, or avoid such actions by consumers, creditors, and collectors. Wage garnishment, except as a result of student loans, is only possible when creditors and collectors manage to receive a court ordered judgment for such an action.
This action, otherwise known as "administrative wage garnishment", can only be up to 25 percent of the disposable income, as stated earlier. This is one of the important points that one should remember because more than that is illegal.
☛ When deducting money from the payroll, at times, there is not enough money in the employee's pay to satisfy all the garnishments. If in case there is more than one on the person, then in such cases, the correct order to take a garnishment must be followed.
Like if the debts to be taken care of are in such order, one with federal tax, the other with local tax, and the other is credit card one, then the first garnishment that will be taken would be the federal tax one, then the local tax one, and ultimately, the credit card one.
What Can You Do to Stop It?
There are several ways to stop this action like making a deal with the creditor, filing for a consumer proposal, and filing for bankruptcy. So, prior to your employer receiving a garnishee summon, you should make an effort to strike a deal with your creditor.
This comes as the simplest way of stopping it, since otherwise stopping the wage garnishment might, as well going to the extent of getting a consumer proposal. Filing for personal bankruptcy also can stop it, of course, depending on who the creditors are.
The longer you take to deal with it, the more you have a chance to lose more and more from your pay check; thus, it is better to deal with it as soon as you have determined what you want to do about it.