What Happens When You Quit Your Job & You Have Wage Garnishments?

One way to get away from wage garnishment is to quit your job. Once you've quit your job, your creditor simply can't garnish your wages, as there are no wages to garnish. Of course, when you get another job, your wages will be open for garnishment. However, it will take your creditor awhile to catch up with you.

Overview

Wage garnishment can occur when an individual defaults on debt. The most common types of creditors that garnish wages are student loan lenders, child support creditors and the Internal Revenue Service (IRS). When garnishment occurs it's typically because the debtor hasn't attempted to work out alternative payment arrangements. Although for most creditors, the amount they can collect from each paycheck is 25 percent of "disposable income"; disposable income is an employee's earnings after compulsory deductions are taken out. However, certain types of creditors, such as child support creditors and the IRS, are allowed to collect up to 50 percent of an employee's disposable earnings.

Procedure

If you're having your wages garnished, it's because your creditor went to court and received a garnishment order. The garnishment order is then sent to your employer, and your employer is required by law to comply with the order. Your employer is responsible for making the garnishment deductions, and if your employer refuses, you aren't liable, your employer is. When you quit your job, your employer is no longer liable, but your employer is responsible for informing the levying officer that you are no longer employed.

Quitting Your Job

When you quit your job, the creditor garnishing your wages has no recourse but to wait until you find another job. When you eventually become employed, the creditor must seek another garnishment order. It can take quite some time for your creditor to find you if you change jobs. As such, quitting a job provides relief from garnishment, at least temporarily.

Additional Considerations

After you quit a job, your garnishments stop. However, if the creditor is the IRS or if you've defaulted on government student loans, your bank account can be seized. Additionally, neither the IRS nor the federal government are required to obtain a garnishment order from a court. If you've quit your job, and you want to continue paying the creditor who was garnishing you, you can contact the creditor directly and ask to set up a payment plan. If you don't do this, your creditor will likely seek another garnishment order when you find another job. Keep in mind, however, this can take several months, particularly if you move to another state.

References

• Home & Family Finance Resource Center; Tough Times Series - You Can Avoid Wage Garnishment; Monica Steinisch
• SCV Bankruptcy; They're Garnishing My Wages; Hale Andrew Antico, Esq
• Life Portal: What Happens If You Leave a Job With Wage Garnishment?
• Main Street; Garnished Wages - How to Deal; Brian O'Connell; February 2011