If you have fallen behind on debt payments and have not made satisfactory arrangements with your creditor to bring your loan out of past-due status, the creditor may use wage garnishment as a means of collecting amounts you owe under your loan. Garnishment involves forcing your employer to withhold a portion of your wages to send to a court for payment to your creditor. Amendments to the Hatch Act, which was adopted in 1939 to regulate political activities of government employees, allow creditors to garnish the wages of military and civilian Department of Defense employees.
Private Creditor Judgment Procedure
Before a private creditor can garnish the wages of a military or civilian Department of Defense employee, it must file a civil suit to obtain a judgment against the debtor. Typically, the creditor must file the suit in the county where the debtor lives. State laws dictate the time period during which the debtor can respond to raise an objection to the lawsuit; however, the time period is around 30 days in most states. If the debtor cannot raise a valid defense or does not respond, the court issues a ruling in favor of the creditor.
Non-Judgment Garnishment
Certain types of debts owed by a military or government employee do not require a civil suit or judgment. Debts owed for alimony and child support are not subject to the lawsuit requirement. Also, a government entity to which a debtor owes a past-due tax liability does not have to file a civil suit to garnish wages.
Enforcing Wage Garnishment
A creditor that may legally garnish the wages of a military employee or civilian Department of Defense employee must serve a wage garnishment order on the Defense Finance and Accounting Service in Cleveland, Ohio. This entity processes wage garnishment orders and withholds eligible amounts to forward to the court or creditor for payment of a valid debt obligation. Eligible amounts are deducted before the debtor receives her paycheck, removing the debtor's activity in the garnishment process.
Limits
Federal law limits private debt wage garnishment to 25 percent of the debtor's disposable income, which is the amount left over after the employer has deducted all applicable taxes. Wage garnishment is also subject to minimum income limitations -- a private creditor cannot garnish wages equal to 30 times the federal minimum wage per week. Taxes, alimony and child support garnishment is limited to 50 percent of the debtor's disposable income.
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