Nearly one in ten working Americans between 35 and 44 are having their wages garnished for things like back taxes, delinquent child support payments and court judgements. When your wages are garnished, the court gets a portion of your wages before you even see your payroll check. However, there are strict rules governing how garnishments are handled. While every state's laws regarding garnishment are slightly different, there are a few important things that are common to all states, things you need to be aware of if your wages have been or are likely to be garnished.
1. You can't lose your job over a single garnishment. The federal Consumer Credit Protection Act prohibits employees from losing their job if their wages are being garnished for a single debt. However, there is no protection from the government if your wages are being garnished for more than one debt.
2. Some income cannot be garnished. Social Security disability benefits are not subject to garnishment. In most cases, neither are Workman's Compensation benefits. Some income, such as Social Security retirement benefits, VA benefits and private pension income can only be garnished for specific things, such as back taxes and child support, and are generally not available to court judgements against you for things like credit card debt and default on personal loans.
3. They can't take all of your check. Federal laws regarding garnishments limit the amount of money that can be deducted at 25 percent of your wages after taxes. In addition, the total deducted cannot exceed 30 times the federal minimum wage.
4. Garnishment debt generally accrues interest. It's easy to think of the amount you owe the IRS or a creditor as a fixed amount. However, in most cases, that amount will continue to accrue interest (and sometimes penalties) until the entire amount is paid.
5. Your wages can be garnished for your student loans. If you default on your government-backed student loans, the government can garnish up to 15 percent of your after-tax wages. That's whether or not you've been able to get a job in your desired field.
Admittedly, having your wages garnished isn't a pleasant experience. However, knowing as much as you can about the process--and about what the court can and cannot do--will help you get through the situation as painlessly as possible. Garnishment is a serious process. If you are facing this type of action, it's a good idea to seek the advice of a good tax, family law or bankruptcy attorney like Sinsheimer, Stuart J to make sure that your rights are protected.