How does Wage Garnishment work?
If you’ve been threatened with wage garnishment, it’s perfectly normal to be scared. After all, there are plenty of stories of people who were barely keeping afloat financially until a long-forgotten bill popped up, forcing them to devote a portion of their paycheck to it every month. If you’re someone who might be forced into wage garnishment soon, you need to know how it works.
The first thing to realize is that no one can simply demand your paycheck without going through a series of legal checkpoints. This makes wage garnishment time consuming and expensive, discouraging most creditors from pursuing it unless the debt is large. To start the process, a company has to prove to the court that you owe them an undisputed debt and that they have followed state and federal law while trying to collect the debt. This process can take anywhere from several weeks to a few years.
After proving that they can legally collect the debt, the court will issue an order for wage garnishment. This order must be delivered or “served” to the debtor’s current place of employment. It will not work on Social Security checks, income tax refund checks, or other types of government assistance. It’s also important to note that in many states, if a person changes their place of employment the collection agency has to get a new order for wage garnishment.
Before the money is deducted from your paycheck, you will be notified in several ways. You will receive a written notice of all of the court proceedings, as well as written notification of when the wage garnishment will begin. In many states, your employer must also warn you before they start to garnish your paychecks. This gives you time to make other arrangements, such as a debt consolidation loan, to get the debt paid off before money starts to disappear from your paycheck.
Under a wage garnishment, a collection agency is only allowed to take 15% of your paycheck or less. Many states also have a minimum amount (usually equivalent to 30 hours a week of minimum wage work) that the employer must leave you before wage garnishment begins. For example, a person earning $1000 a week might have the first $400 protected, and the remaining $600 garnished at 15%, causing him or her to lose $90 per check. The garnishment continues until the debt is paid off.