When you miss a payment on a debt, your creditor will likely attempt to help you bring your account current by contacting you by phone or mail. However, if you continue to miss payments, your creditor may use more aggressive collection strategies. In most states, this can include garnishment of your wages. If your state permits wage garnishment, the creditor may take a portion of your earnings even if you have just started a new job.
Statute of Limitations
Your state's statute of limitations stipulates the time frame during which a creditor may pursue collection efforts, including wage garnishment, after obtaining a legal judgment against you for your debt. The statute of limitations varies by state -- for example, Georgia allows wage garnishment for seven years after the date of judgment, while Massachusetts permits wage garnishment for up to 20 years. This means that even if you were unemployed when the creditor obtained a judgment, the creditor may seek garnishment if you start a job within the statute of limitations.
Finding Your Employer
You may think that if you change jobs or start working after a civil judgment for a debt the judgment creditor will not find out about your new employer. However, most states permit a judgment creditor to question you about your income and assets at any time within the statute of limitations for your judgment. Depending on your state's laws, you may have to answer written interrogatories or attend a debtor's examination hearing to disclose financial information, including the identity of your new employer. If you do not answer or attend the hearing, the court will typically hold you in contempt, which can result in fines or imprisonment.
Garnishment Order
After finding out about your new job, the judgment creditor can apply to the court that awarded the judgment for a writ of garnishment, which authorizes the creditor to seek recovery of the judgment debt by taking a portion of your earnings. The creditor or court will then order your new employer to withhold the nonexempt portion of your earnings and send them to the court or creditor to apply toward your debt. Once your employer has been served with a garnishment order, garnishment will continue until the debt is paid, you leave your job or the statute of limitations expires.
Garnishment Limitations
Most states' garnishment laws mirror federal law, which protects at least 75 percent of your earnings from garnishment for judgment debts other than child support or taxes. Federal law provides a complete exemption if you earn less in a week than 30 times the hourly federal minimum wage. Some states also provide exemptions higher than federal law -- for example, South Carolina, Texas, Pennsylvania and North Carolina exempt all of your wages from garnishment for most private debts.
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