When a person gets behind on bills and cannot pay debts on time, a creditor may seek to seize part of a person's wages through a process called garnishment. Garnishments are typically the last-resort option creditors exercise to recover part of a delinquent debt, because the process requires approval by a court and involves the debtor's employer.
Garnishment Process
Garnishments are authorized only by a judge and only after a court has granted a debt judgment to the creditor. Once the creditor has obtained the judgment, the creditor may attempt several collection methods -- including bank account levies and collection agencies. Garnishment occurs when the court that issued the original debt judgment orders the debtor's employer to withhold part of the debtor's wages to satisfy the debt. Exception: Certain government debts, including tax arrears and student loan defaults, can be garnisheed without a court hearing.
Federal Limits
The first $154.23 of a person's weekly income is exempt from all garnishment, as a matter of federal law. Up to 25 percent of income above that threshold is subject to garnishment. For example, a person who earns $500 per week could face a maximum garnishment of $86.44 -- ($500-$154.23) times 0.25.
State Limits
Each state sets limits on how much of a person's disposable income may be subject to garnishment, the valid duration of a garnishment order and special consideration for delinquent child support payments. State practices vary widely, so check with your local court office to learn the rules in your area.
Exempt Wages
Income related to welfare payments, Social Security and veterans benefits are exempt from garnishment both before and after they are paid. Unemployment benefits, workers compensation and government retirement benefits are exempt from garnishment before they are paid but may be levied from a bank account.
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