About Wage Garnishments
Wage garnishment refers to the practice of having money withdrawn directly from your paycheck when the check leaves your employers, before you have an opportunity to receive the full amount of your check. Wage garnishment is put into place when you owe money to a creditor that you were unable or unwilling to pay on your own. The creditor gets an order from a court, or a judgment against you, allowing it to take money from your paycheck towards this debt. This ensures that the creditor gets paid.
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Types of Wage Garnishment
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Wages can be garnished for a number of different reasons. If someone obtains a judgment against you in court and you do not pay it, that person can obtain a writ of execution against you. A "judgment" is a court order that you pay the person who took you to court a set amount of money. A "writ of execution" is a court order that allows the winner of the money to collect the money he is owed. This "writ of execution" can take the form of wage garnishment, which allows the court to go directly to your employer and take a set portion of your paycheck.
Wages can also be garnished if you fail to pay a defaulted student loan or if you do not pay your taxes. The government typically does not have to get a court judgment or writ of execution, as other creditors do, in order to garnish your wages. Thus, if you default on student loans to the government or if you owe money to the IRS, your wages can be garnished without a court hearing.
Limits on Wage Garnishment
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A wage garnishment can't take the entire amount of your paycheck. There are limits on the amount of money that can be garnished or taken from you. These limits depend on the type of entity who is entitled to the garnished wages and the laws of the state you live in. These limits are designed to ensure that garnishment does not create undue financial hardship for you or for those you are supporting.
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Garnishment Due to a Court Judgment
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When wages are garnished following a court judgment, generally no additional notice is required since the garnishment is typically ordered as part of the original hearing. The hearing itself and the judgment are considered to be sufficient notice. However, if a garnishment is not obtained until after the original judgment is handed down, there may be additional notice requirements.
The amount of money to be garnished from your paycheck and the length of time of the garnishment vary depending by state. Typically, you are entitled to keep 30 times the minimum wage, plus an additional amount for each child. Only "disposable" income, or income exceeding these set minimums, can be garnished to satisfy a judgment.
Student Loan Wage Garnishment
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According to the Student Loan Borrower Association, the government can't garnish your wages until you make 30 times the minimum wage. The maximum amount the government can garnish for student loans is 15 percent of your disposable pay.
Student loan companies must also provide you notice, and the opportunity for a hearing, before garnishing your wages. If you request a hearing within 30 days of receiving notice, garnishment must be postponed pending the results of the hearing. The hearing gives you the opportunity to prove that garnishment would cause you or your dependents financial hardship, and/or that you are not responsible for the defaulted loan for a variety of reasons, and/or that you have already repaid the loan.
IRS Wage Garnishment
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The amount the IRS can garnish is dependent on a number of factors, including the amount owed, your marital status, and the number of dependents you are supporting. When garnishment is at the order of a state court to satisfy a judgment against you, the maximum amount that can be garnished is determined by state law.
The IRS must send you an official "notice" or "intimation" alerting you to the back taxes owed and its intent to start the "recovery process" in the form of wage garnishment. This notice is typically sent 30 days before garnishment begins.
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