Debt and Wage Garnishment
Recently a client contacted me because their wages were being garnished and they weren’t sure why. After some digging it appears the garnishment should not have happened, but how can wages just be garnished?
What is Garnishment
Garnishment is a legal process for collecting on an unpaid debt. It allows debt collectors to take money or property from you to pay back a debt.
The most common form of garnishment is wage garnishment. Wage garnishment is when some of your pay is taken to repay a creditor. Therefore, money is deducted from your paycheck until the debt is paid in full or other payment arrangements are made. Typically, a court order is required to start garnishment of wages because it is a legal action. However, in some circumstances, such as if you default on a student loan, a court order is not required.
How much can be garnished from your wages varies depending on the type of debt. If you default on student loans, up to 15% of your disposable pay can be garnished. The Consumer Credit Protection Act limits the garnishment amount based on your disposable earnings, visit www.debt.org/garnishment-process/ to learn more about garnishment limits.
What can I do if my wages are garnished?
First, if you receive a notice to appear in court respond. Failure to respond or show up will likely force the court to garnish your wages.
Next, contact the creditor or collection agency and ask for proof that you owe the debt. This is called validating the debt.
Finally, once the debt has been validated, ask the creditor or collection agency what other options are available other than wage garnishment.