Information on Paycheck Garnishment

If you fall behind on a debt, one of the worst things you can do is ignore it. A creditor serious about securing payment of a debt will use any means to do so. One avenue they can pursue is the paycheck garnishment. If you understand how garnishment works, you may be able to avoid it.

Causes

A creditor asks for garnishment of your paycheck to recover money from a debt that you refuse to pay after he has made previous attempts to collect it. If you fall behind on child support or alimony, the court may garnish your pay. The government can demand garnishment if you default on taxes or a government-backed student loan or business loan. A company that grants consumer credit may also petition to garnish your paycheck if it wins a judgment for debt you owe.

Process

Obtaining a garnishment is a relatively easy process. Once a creditor obtains a judgment for the debt you owe, he simply goes to the court or clerk's office and fills out a form called a request and writ for garnishment. Once the court signs the form, the creditor pays a small filing fee, often only $15. The creditor gives the writ of garnishment to the local sheriff, who handles the duty of officially delivering the writ to your employer. Your employer must then take a certain amount from your paychecks and deliver it to the sheriff.

Limitations

The Consumer Credit Protection Act limits how much of your paycheck can be garnished. Creditors may take the lesser amount of 25 percent of your disposable income or the amount by which your earnings are greater than the amount of minimum wage multiplied by 30. Your disposable income is the amount you make after tax (federal, state and local), Social Security, unemployment insurance and state employee retirement program deductions. For child support or alimony, the garnishment may be up to 60 percent of your disposable income, plus an additional five percent if the payments are more than 12 weeks past due.

Avoidance

The best way to avoid a garnishment is to pay your bills. If you cannot pay your bills, make payment arrangement with the creditor. Most creditors dont want to go through the trouble or expense of forcing payment through the courts. If your creditor does get a judgment and starts the process of getting a garnishment, you can pay the full amount of the judgment or ask the court for a slow-pay motion. Some states allow use of the motion, which lets you propose a weekly or monthly payment amount on the debt. The judge or your debtor may approve the amount or ask that you pay more.

Considerations

North Carolina, Pennsylvania, Texas and South Carolina only allow garnishments for child support, unpaid state and federal taxes, court fines, student loans or restitution for a crime.

The government does not need a court order to garnish your paycheck.

A garnishment can affect Social Security payment and veterans benefits.

An employer cannot ignore a writ of garnishment and must deduct the amount from your paychecks as often as you receive them until the debt if resolved.