Garnishment is a legal process that allows a creditor to collect money directly from a debtor’s wages, bank account, or other income sources to satisfy an unpaid debt. It typically involves a court order instructing an employer or financial institution to withhold a portion of the debtor’s earnings or funds and send it directly to the creditor. Garnishments are commonly used to recover unpaid child support, taxes, student loans, or court judgments. There are federal and state laws that limit how much can be garnished from a person’s income to protect them from financial hardship.
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Key Facts
- Types: Wage garnishment, bank account garnishment, and tax refund garnishment.
- Court Involvement: Usually requires a court judgment, though some debts (like taxes or student loans) can bypass this step.
- Limits: Federal law caps most wage garnishments at 25% of disposable income or the amount by which weekly earnings exceed 30 times the federal minimum wage - whichever is less.
- Protected Income: Some sources (like Social Security or veterans’ benefits) are usually exempt from garnishment.
- Employer Role: Employers are legally obligated to comply with garnishment orders and may face penalties if they fail to withhold wages as required.
1. What is wage garnishment?
Wage garnishment is when a portion of an employee’s paycheck is legally withheld and sent directly to a creditor to repay a debt.
2. What kinds of debts can lead to garnishment?
Common examples include child support, alimony, unpaid taxes, student loans, credit card debt, and court judgments.
3. How much of my paycheck can be garnished?
Under federal law, up to 25% of your disposable income can be garnished, or the amount exceeding 30 times the federal minimum wage - whichever is less. States may impose stricter limits.
4. Can I stop a garnishment once it starts?
Possibly. You may be able to negotiate a repayment plan, challenge the garnishment in court, or file for bankruptcy, depending on the circumstances.
5. Are employers allowed to fire me for having a garnishment?
No. Federal law prohibits employers from firing an employee because of a single garnishment, though protection may not apply if you have multiple garnishments.
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