If you fail to pay a debt, a creditor or debt collector has the right to sue you in court. If the creditor wins, a judgment will be entered against you. According to the U.S. Department of Labor (DOL), that judgment allows the creditor to obtain a wage garnishment against you, order your employer to turn over part of your wages every pay period until the debt is paid or get your bank to pay funds from your account. Because you still need to eat and get back and forth to work, federal law puts limitations on how much can be taken through garnishment, but it will pinch no matter what. Your best option is to work out an agreement before going to court.
Amount Allowed
The DOL specifies that a wage garnishment can require an employer to take up 25 percent of your take-home pay out of each check until the debt is paid. For garnishees who are living on low incomes, the employer has to ensure you are still left with a certain amount of money under the law. That amount usually is equal to 30 times the minimum wage.
Special Debts
If your wages are garnished due to failure to pay child support, alimony or certain taxes, up to 50 percent of your income can be withheld if you owe child support, says the DOL. If you owe child support and have no other dependents, 60 percent can be withheld. If these special debts are more than 12 weeks past due, the garnishment can order an additional 5 percent to each withholding, making the amount 55 percent and 65 percent, respectively.
More Than One Garnishment
Federal law, and in some cases state law, limits how much can be taken out of each of your checks. However, according to Bills.com, some debtors often have more than one garnishment. A second creditor who has garnishment orders against you normally will have to wait until the first garnishment is paid. This means it will take longer to pay off both debts and you will be living off of a lower income for a much longer period of time.
Exempt Income
If any of your income comes from certain federal benefits, it will be protected entirely, according to the Federal Trade Commission (FTC). These benefits include Social Security, Supplemental Security Income (SSI), veterans' benefits, student assistance, civil service and federal retirement, railroad retirement benefits, merchant seaman wages, foreign service retirement, longshoremen's and harbor workers' death and disability payments and Federal Emergency Management Agency (FEMA) assistance.
Challenge the Garnishment
To challenge a garnishment, you must be proactive. Show up in court when the collector or creditor files suit against you, the FTC advises. Make your case and demand proof of the amount that the creditor claims you owe. It is possible to work out an agreement at this stage and avoid a judgment and garnishment altogether.
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