Garnishment is a legal action where a creditor seizes money or property belonging to a debtor that is in the possession of a third party. In a wage garnishment, the creditor seizes a part of the debtor's periodic wages from the debtor's employer. Wage garnishments in New Jersey are regulated by both state law and federal law.
State Law Procedures
New Jersey statutes allow for a wage garnishment action either through an action to enforce an existing judgment that a private creditor holds against the debtor or by an administrative order for a government or court related debt. To effect a garnishment, the debtor's employer must be served with a legal order called a writ of execution. This writ must clearly identify the debtor and specify the amount and nature of the debt and the identity of the creditor. In most cases, the debtor is also notified of the writ order.
State Law Limits
State statutes place restrictions on the amount of money that can be garnished from a debtor's periodic wages. For garnishments regarding private debts, such as credit cards or unpaid bills, the amount is limited to 10 percent of the wages for a debtor-employee who earns less than 250 percent of the federal poverty level -for his family size. A garnishment for a state government related debt is limited to 25 percent. In either type of garnishment, if the debtor earns over 250 percent of the federal poverty level, then the court can order a higher garnishment amount up to the federal law maximum.
Federal Law Limits
The federal Consumer Credit Protection Act imposes maximum amounts that can be garnished from a debtor's wages. States, such as New Jersey, can make these maximums less, but not more. For a private debt, the federal maximum is 25 percent of the periodic net wages. For debts regarding support payments, the maximum is up to 60 percent. Garnishment for student loan debt is limited to 10 percent. For debts regarding federal taxes or bankruptcy actions, the maximum is determined by the rules of the IRS or court.
Other Provisions
The federal law also prohibits an employer from firing the debtor-employee due to a garnishment action. Both the state and federal maximum amounts are aggregate, meaning for all garnishment orders. Private creditors usually are subject to a six year statute of limitations to secure a judgment against the debtor. However, such a judgment usually is valid for 20 years. State law makes the garnishment an ongoing lien against current and future wages, lasting until the debt is paid in full.
0 comments:
Post a Comment