I was recently reading the Q&A section of a legal website when I ran across a question about wage garnishment. The writer had apparently received notice from his employer that his wages were being garnished by a creditor. He wanted to know what that meant in practical terms.
Wage garnishment is actually a pretty simple principle. A garnishment order is always the result of some sort of court action. When an employer receives a garnishment order from the local sheriff’s office, HR is compelled to withhold a certain amount from the employee’s weekly pay and forward it to an authorized party entitled to receive the money.
Regular deductions will take place until either the debt is paid off or the employee makes other arrangements. That is pretty much the basic rundown. However, details differ from one state to the next as garnishment is regulated at the state level.
Why Wages Are Garnished
Wage garnishment can occur for several different reasons. One of the most common is to satisfy a civil judgment. According to Salt Lake City’s Judgment Collectors, wage garnishment is sometimes the best option for compelling payment – especially in bad debt cases.
A company might pursue a consumer for failure to pay. Maybe it’s a utility company going after a customer who hasn’t paid his bill for more than a year. If the utility company wins its case, a judgment is entered against the customer. Wage garnishment might be the preferred option for collecting debt.
Wages can also be garnished to recover:
- unpaid local, federal, and state taxes
- delinquent child support payments
- delinquent maintenance payments
- unpaid civil fines and penalties
- unpaid fines for traffic violations.
Not every state allows garnishment. Most do, but a few don’t. Among those that do, some also allow garnishing consumer bank accounts. It is a similar situation in which the consumer’s bank is compelled to withdraw a certain amount of money and forward it to the appropriate recipient.
What Can Be Garnished
The person who asked the original question I referenced earlier also wanted to know what could be garnished. I suspect what he was really asking was how much. Herein lies another matter that differs from one state to the next. In every state that allows garnishment, the starting point is disposable income. Garnishment can only be applied to disposable income, meaning income that isn’t required to pay the consumer’s normal bills.
Using disposable income as a starting point, states generally determine the amount that can be garnished as a percentage. Let us arbitrarily say 50%. If a consumer’s disposable income adds up to $100 per week, only $50 could be garnished.
Some states put no such limits on garnishments for paying back taxes, child support payments, or maintenance payments. They allow 100% garnishment of a person’s disposable income for these three things.
Not Ideal, But It Works
Given how expensive daily life has become, you might be tempted to believe that paying off a sizable debt by way of wage garnishment could take a long time. You would be right. That’s why Judgment Collectors says garnishment isn’t the ideal solution for collecting outstanding debts. But if it is the only solution, it works.
If you are ever hit with a garnishment order, you will have to live with the fact that a certain amount of your weekly pay is going to be taken and forwarded to whomever you owe. Your employer will be compelled to comply with the garnishment order whether you agree with that order or not. The best way to avoid garnishment is to keep your nose clean.
