After working diligently in your chosen career, imagine the surprise when you look at your pay stubs and see that you are missing money. You had a budget that was depending on those funds, and now they are gone. What happened? It’s called garnishment of wages.
Many people are not aware of the reasons why their wages may be garnished. There are multiple reasons why, and ways a creditor may choose to garnish wages. Let’s take a closer look.
What is garnishment?
Garnishment is when a person, company, employer, bank or government agency automatically deducts money from a debtor’s income or bank account to collect a debt. Some creditors will file a lawsuit and obtain a money judgment and court order before garnishing wages.
There are many reasons why a person may find their wages are being garnished. These include child support, consumer debt and student loans. Federal law does limit how much of your income can be garnished at any time, but garnishment can affect:
- Personal income from wages, salaries, commissions and bonuses
- Income from pensions or retirements plans
The good news is, according to Title III of the Consumer Credit Protection Act (CCPA), employers cannot fire a worker for having their wages garnished — but they do have to comply with the court’s order to withhold the worker’s income.
What can be done?
Many people have no idea how to respond once their wages have been garnished. Garnishment is a legal procedure. As such, it is often beneficial to explore all of your legal options. If you’ve reached the point where your wages are being garnished over unpaid debts, it may be time to look into debt relief through bankruptcy or other means.