Is Wage Garnishment Legal?

Yes, wage garnishments are legal. Wage garnishments arise when employers receive a court order to withhold part of employees’ wages to repay their debts. Typically, these court orders are the result of creditors such as credit card companies, former landlords or collection agencies filing lawsuits and winning. When a person, also referred to a debtor, loses, the amount of money they owe—typically up to 25 percent of their earnings—can be deducted from their paychecks. However, child support and spousal support can deduct up to 50 percent of money. Under the Consumer Credit Protection Act, federal law regulates specifics the amount of money that can be withdraw and protects employees against being fired because of the garnishments.

For Creditors: Collect your money

According to Nolo, deciding to garnish wages is risky. For instance, creditors who threaten debtors with wage garnishment could obtain an agreement to pay. However, implementing a garnishment could cause a debtor to take drastic measures such as quitting their job.

There are limitations, or obstacles, to creditors pursuing wage garnishments. The debtor may already have their wages garnished. This means that if the first creditor isn’t taking less than 25 percent of the debtors’ pay, then no other wage garnishments are allowed. Also, the debtor must have enough disposable income to take. If the debtor is self-employed or their pay is below the poverty level, there’s no way to collect through garnishment.

For Debtors: Money is taken from paychecks until debt is paid

Wage garnishments are deducted from pay checks, commissions, salaries, bonuses and any periodic payments from a retirement or pension programs, according to the Department of Labor (DoL). Tips are usually not included in wage garnishments. Once a creditor has provided a copy of court orders to the necessary legal authorities, employers will notice the employee that the money will be withheld.

Seek legal help

Whether a person is seeking wage garnishments or trying to stop one, a lawyer should be contacted. A lawyer can help creditors find out when they can garnish an employee’s wages and how to go about doing so. Also, a lawyer can assist an individual find any alternatives such as bankruptcy to stop any wage garnishments or make payment arrangements.

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