Wage Garnishment Orders Cannot Garnish It All

A wage garnishment order is an order by a court to automatically take a set amount of money from a person’s paycheck and send that money directly to another party.  The person whose wages are being garnished never sees the money and is thus not able to prevent the transfer to the other party.  A garnishment order is normally applied for after a defendant in a prior court case has been found liable for damages or for a support order and has failed to pay on that order.

Due Process

The law makes it possible to garnish someone’s wages but the law also offers some protections for those who are having money taken from them.  Because a garnishment is the taking of property from someone, the person who is subject to the order must have due process before the order is entered.  At the minimum, due process must consist of prior notice and a hearing.  At the hearing the defendant must have the opportunity to be heard and present a defense.

Laws that Protect

The federal government and every state also have statutes regarding wage garnishments: when a garnishment is allowed, when a garnishment is not allowed, how much money may be taken per pay period and any income that may be exempt from a garnishment order.  Federal law also requires that the formula used to establish the amount must be based only on the defendant’s “disposable income.”

Disposable income usually means the income left after taxes and eligible deductions such as retirement accounts are deducted.  Current federal law sets the maximum that may be taken per pay period at 25% of the person’s disposable income, in cases of child or spousal support the court may order up to 50%.  If a garnishment action is brought because child or spousal support order payments are delinquent 60% of the defendant’s disposable income may be taken.

Because a garnishment order is served on the employer, the employer is legally obligated to commence garnishing your wages.  Some employers may find that firing the employee is easier than going through the administrative steps that a garnishment requires.  The federal Consumer Credit Protection Act forbids employers from terminating employees who are subject to a single garnishment order.  There are no protections however for those who have more than one garnishment order.

What you can do

There are several options for stopping a wage garnishment.  One, you can quit your job.  Your creditor won’t get your money, but neither will you.  Two, you can pay the debt in full.  Three, you can file for bankruptcy protection.   Filing for bankruptcy may provide an immediate temporary stay to any debt collections, including court ordered garnishments.  However, garnishment orders may not be dischargeable in bankruptcy.  Bankruptcy may not be as good as an option though because it may only allow a temporary reprieve but it will stay on your credit report for up to 10 years.

If you are subject to a garnishment order you do have options.  If you have a good faith hardship because of the garnishment order the court may reduce the amount.  A good faith hardship may consist of having a child, losing a job or incurring a major illness or injury.  Consult an attorney for specifics in your state.