If a person has an unsettled debt, a possible way of settling it is through wage garnishment. Lenders have the right to garnish a borrower's monthly or weekly wages until the borrower pays off the debt in full. Sometimes, a lender may garnish, until such time that the borrower is able to offer a different means of paying off the debt. Either way, a borrower can pursue certain wage garnishment exemptions.
The Internal Revenue Service or a lender can go after a borrower for wage garnishment if a borrower is not able to, or cannot pay for his or her obligations. Some of the reasons why lenders or the IRS go after a borrower's wages for garnishment include: unsettled restitution or fines ordered by the court, unpaid student loans that are federally guaranteed, taxes that are overdue, and arrears in child support and/or alimony payments.
If a lender intends to garnish a borrower's earnings, the court system must be utilized. There are lots of paperwork involved if a lender files for wage garnishment in their favor. Among the steps that have to be taken are informing the borrower of the intended wage garnishment, and informing the employer as well, of the decision of the court. After this has been accomplished, the employer proceeds to garnish the amount ordered by the court, from the borrower's wages.
On the other hand, the IRS does not have to go through the courts in order for a wage garnishment against a debtor is carried out. The IRS studies the account of the debtor, then notifies the person of its intent to collect payment for debt. If the debtor chooses to ignore the IRS' communication, or fails to arrange for a payment plan, the IRS will proceed with garnishment. Before doing this, however, the IRS sends out somebody to hand deliver to the debtor, its final notification of its intention to collect payment for the debt, or else garnishment will be commenced at a specified date.
The IRS or a lender is permitted by federal law to take one-fourth of a debtor's earnings. However, in certain states, the amount is less. The court has the jurisdiction to exempt certain people from wage garnishment.
Wage garnishments may be lessened or prevented. To be able to do this, a person has to accomplish many required paperwork in order to substantiate that he or she should be given wage garnishment exemptions. These papers include financial disclosures, and challenges the reasons given by a lender for garnishing the debtor's earnings. The court may approve wage garnishment exemptions for certain reasons, including: the debtor's earnings show that it is lower than the poverty line; the debtor's child support payments constitute huge deductions from his or her earnings; the debtor's wages are made up of federal support like disability and social security. Some states are strict in permitting garnishment of wages.
If a borrower or debtor believes that he or she does not warrant wage garnishments, then the next best step is to look for a lawyer, and seek legal assistance. If the borrower or lender is in really dire straits, perhaps a lawyer can provide pro bono legal assistance so the garnishment exemptions are obtained.