Are you facing a wage garnishment? It can be demoralizing to see some of your hard-earned salary paid out to creditors, but wage garnishment is a legal procedure. Learn how the process works and whether you are in a position to get the garnishment lifted.
It's important to understand that wage garnishments are typically the end result of a long process to collect a debt. This is a fairly severe consequence and applies to debts such as:
- Unpaid state, city or federal taxes
- Child support arrearages
- Student loans
- Personal loans
- Judgments from court cases
How creditors garnish wages
When debtors fail to repay their debts, creditors to which the repayments are owed can schedule court hearings where the debtor must appear to answer the demand for payment. Debtors must be notified of the date, time and place of the hearing. Frequently, this notice comes in the form of a subpoena hand-delivered by a civil sheriff's deputy.
At the hearing, creditors have the burden of proof that the alleged debtors owe their creditors specific sums of money for the original debt and collection efforts but have failed to acknowledge and/or pay off the debts.
If the creditors convince the court the debts are legitimate, the judge issues orders that require the debtors' employers to hold back some of the money from their workers' paychecks.
The court issues specific instructions in a letter to the employer for collecting this sum of money until the debt is extinguished. Typically, an employer will notify the debtor - their worker - in writing that the wage garnishment process has been initiated. Then, the company sends these payments to the creditors. Wage garnishment will end once the debts are paid in full.
Are there any protections from garnishments?
There are, and these protections can keep debtors from impoverishment during this repayment procedure. They include the following:
Limiting the amount of the garnishment
The Consumer Credit Protection Act (CCPA) prevents creditors from garnishing more than 25 percent of the disposable earnings of a debtor each week. As that applies when garnishments are filed in federal court, garnishments for child support arrearages may be for as much as 60 percent of a debtor's disposable income.
In other cases, judges may order a garnishment equal to the amount of disposable income that's in excess of 30 times of the federal minimum wage, or the lower of the two options.
What is disposable income?
Your disposable income is all that you earn from every income stream after taxes. Bills for life necessities, e.g., mortgage, rent, health insurance, food, are exempt from these calculations.
Sometimes debtors have multiple debts to repay. Of course, they may not earn enough income to repay them simultaneously. In these instances, later creditors have to wait until prior debts are extinguished to seek repayment.
Can I get fired for a garnishment?
Your boss can fire you for multiple garnishments (but not your first one). There are federal laws in place to protect you from termination solely on account of a single garnishment.
Don't avoid addressing wage garnishments
It's always unwise to avoid dealing with a wage garnishment. Show up for your judgment debtor hearing with your attorney and bring documentation to substantiate your attempts to satisfy this debt. If you have tried in vain to negotiate a payment schedule, bring proof of same as well as proof of earnings and expenses.
Wage garnishments can be modified by the court if your situation changes. Your Maryland attorney can advise you on this matter.