Wage garnishment is often the last resort for a creditor if a debtor is not responding to his collection attempts. He can file a lawsuit and obtain a writ of garnishment, which allows him to garnish a debtor's wages or bank account or filing a lien against his property. Wage garnishment allows creditors to start receiving debt payments sooner than with other collection options.
Wage Garnishment Process
If you default on your credit obligations or child support payments, a debt or child support collector may sue you in court and obtain a garnishment permission to withhold debt payments from your paycheck. When your employer receives a garnishment order, he must comply with it and withhold the determined amount from your paycheck and mail it to the judgment creditor or the court clerk, who then forwards it to the judgment creditor. Wage garnishment continues until the debt has been paid off.
Child Support
If you are a non-custodial parent, you must pay child support to the custodial parent to take care of the child. The court determines the payment amount, according to your and the custodial parent's financial situations and state laws. If you don't pay, the state may seize the funds in your bank account or garnish your wages. Depending on your state laws, wage garnishment for past-due child support can be as much as 50 percent of your disposable wages if a worker is supporting a second family, or 60 percent if a worker is not.
Wage Garnishment
According to federal garnishment laws, a creditor can garnish as much as 25 percent of your paycheck but must leave you 30 times the federal minimum wage for your basic needs. While some states follow federal garnishment laws, others set their own limits and exceptions to garnishment procedures. Some states, such as California, allow a debtor to contest wage garnishment in court and ask for a reduced payment if wage garnishment creates a financial hardship for him.
Debtor's Options
If garnishment hasn't started, you can avoid it by negotiating a debt repayment or settlement with the creditor. Once your employer starts withholding garnishment from your wages, your creditor may not be open to negotiations. He may demand a full balance payoff plus the court fees and accrued interest charges. If you cannot pay off the balance and have other debts you cannot pay, you may consider filing bankruptcy. However, bankruptcy does not discharge past-due child support.
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