What types of debt that can lead to wage garnishment? Cherney Law Firm, LLC can help answer legal questions like this. Call us for more infor.
What Kind of Debt Can Lead To Wage Garnishment?
Wage garnishment is a legal process in which a portion of an individual’s earnings is withheld by their employer to repay a debt. It typically occurs when a creditor obtains a court order or judgment against a debtor who has failed to fulfill their financial obligations.
When a creditor initiates wage garnishment, they present the court order to the debtor’s employer, who is legally obligated to withhold a certain percentage of the employee’s wages. The withheld amount is sent directly to the creditor to satisfy the debt. The percentage that can be garnished varies depending on the jurisdiction and the type of debt involved.
Garnishment orders are designed to recover specific types of debts, which include but are not limited to the following:
- A money judgment for an overdue debt (such as a personal loan or credit card balance)
- Child support
- Back taxes
- Federal student loans
Garnishment proceedings and legislation can be complex and vary from state to state. Once you receive a garnishment order, you have very little time to respond. Consider using the services of a skilled garnishment law firm such as Cherney Law Firm, LLC.
You may suspect you will face a garnishment order due to non-payment of your debt. It is critical to be proactive. Don’t wait for the hammer to fall before you do anything. Our experienced team of bankruptcy lawyers is familiar with Georgia garnishment law. We can help you devise a strategy to avoid any worst-case scenarios.
One of the most worrying effects of outstanding debt is wage garnishment. In case you experience wage garnishment, learn how to handle it effectively.
The Wage Garnishment Process
Wage garnishment can be divided into two main types: public and private. The key distinction between them lies in the requirement of a court order. Private wage garnishments necessitate a court order before implementation, whereas public garnishments do not require a court order.
Debts Which Do Not Need a Court Order
Creditors are provided with specific rules to facilitate the collection of deemed significant debts.
This category includes outstanding taxes, unpaid child support, alimony payments, and overdue student loans. Among these, unpaid child support stands as the most common reason for wage garnishment.
When it comes to unpaid income tax, the Internal Revenue Service (IRS) has the authority to deduct outstanding taxes directly from your bank account, even without a court order. However, they are required to provide advance notice.
In the case of child support and alimony, wage withholding orders are automatically included in all child support orders. This means that a portion of your wages may be garnished to fulfill these obligations. Similarly, for unpaid student loans, administrative garnishments can be imposed for federal student loan payments that are overdue, and a court order is not necessary for this process to take place.
Debts That Need a Court Order
Certain types of debts require a court order before wage garnishment can take place. For most consumer debts, such as credit card debt or medical bills, a creditor must sue the debtor in court and obtain a judgment to proceed with garnishment. Defaulted private student loans also typically require a court order for wage garnishment.
While the IRS has the authority to garnish wages for unpaid taxes without a court order in some cases, it may still seek a court order for certain situations. In these instances, a court order serves as the legal basis for initiating wage garnishment to enforce debt repayment.
Who Can Garnish Wages Without Notice?
Notice is always required. A court order is typically necessary before a wage garnishment may begin. Creditors must provide the debtor with a letter before pursuing payment on a delinquent debt.
Different rules apply to federal back taxes. But, the IRS must notify the debtor at least 30 days before the start of the bank account levy.
How Much of Your Wages Can Be Garnished?
Garnishment is governed by both state and federal regulations, which provide certain protections for debtors, albeit with limitations. The Consumer Credit Protection Act (C.C.P.A.) imposes restrictions on wage garnishment, and it’s worth exploring some of these limitations in more detail.
Child Support Restrictions
In cases where the debtor does support another spouse or child, child support garnishment is limited to 50% of their disposable income. However, if no such support obligation exists, the garnishment is limited to 60% of the debtor’s disposable income. Additionally, if the support payments are more than 12 weeks overdue, an additional 5% may be deducted.
Consumer Debt Restriction
Consumer debt garnishments are restricted. These restrictions ensure that the garnishment amount is capped at the lower of two options: either 25% of the debtor’s disposable income or the amount exceeding 30 times the federal minimum wage.
Student Loan Restrictions
The Department of Education can deduct unpaid federal government student loan debts. They may deduct up to 15% of disposable earnings.
Under federal law, the IRS is exempt from restrictions when pursuing garnishment for federal taxes.
What Is the Greatest Percentage of Wages That Can Be Garnished?
Regardless of the number of garnishment orders the employer receives, Title III establishes the maximum deductible amount.
The weekly amount for public garnishments may not be greater than the lesser of the following two amounts:
- 25% of the employee’s weekly disposable income or
- the difference between that employee’s disposable income and 30 times the federal minimum wage, whichever is lower.
How Our Law Firm Can Assist You
Have you received a garnishment order? Are you expecting such an order after you have ignored the hounding by your creditors? Our bankruptcy attorney in Marietta can assist you in deciding on a sound strategy moving forward.
At Cherney Law Firm, LLC, we deal with a range of wage garnishment cases in G.A. and are familiar with the applicable regulations. We have experience negotiating with debtors before and after garnishment orders. There are options to reduce the financial burden.
If you are still trying to figure out what to do, schedule a consultation with us. We do not charge for the initial consultation. After that, you can decide how you wish to proceed. Call us today!
Frequently Asked Questions
How Long Can Wages Be Garnished?
Every state has varying timeframes for a garnishment court judgment to take effect. The creditor may extend the garnishment period until the debt is entirely paid, even though it has expired.
Can I Lose My Job Due to Wage Garnishment?
Title III of the C.P.A. directs that an employee cannot be fired for multiple garnishments on a single debt. This is the case even if many garnishments or levies are brought on that single debt.
But, this may not apply to a situation where many garnishments are brought for multiple debts. Different states apply different rules.