Wage Garnishment FAQ

What is wage garnishment? Is it legal?

Wage garnishment is the process of deducting money from your paycheck (including bonuses and commissions). Basically, your employer receives a notice instructing them to withhold a certain percentage of your paycheck. Your employer, however empathetic he/she is towards your situation, cannot refuse to garnish wages once a court order has been obtained.

It is completely legal for federal agencies to garnish your wages. Private companies can too, provided they first obtain a court order. However, wage assignment clauses in consumer contracts are prohibited.

How much are they entitled to take?

The Consumer Credit Protection Act (CCPA), with some exceptions, limits the amount of wages that can be garnished to the lesser of 25% of one’s disposable earnings each week or the amount by which disposable earnings are greater than 30 times the federal minimum hourly wage ($7.25/hour). Some states set garnishment limits that are lower than the federal limit. A few states bar wage garnishment altogether, except in certain limited circumstances (North Carolina, South Carolina and Texas). For more information on complying with the Consumer Credit Protection Act, visit the Department of Labor’s website.

How are disposable earnings calculated for garnishment purposes?

Typically, disposable earnings refer to what’s left over after local, state and federal taxes, unemployment insurance and social security. Unfortunately, any deductions not required by law, such as health insurance, charitable contributions, grocery bills, gas bills, etc. are not subtracted from gross earnings. For this and many other reasons, individuals who have their wages garnished find it very difficult to pay for even basic life necessities.

Can I get fired for this?

Probably not, at least not the first time it happens. Although employees are often embarrassed that their employers are now aware of their financial situation, they don’t have to worry about being fired. Under the CCPA, an employer who fires an employee because his/her wages have been garnished is subject to penalty. (Note that after the second and third judgment, the Act no longer affords the employee this protection.)

How can I prevent wage garnishment from happening?

Wage garnishments result from a failure to pay a debt, most commonly child support, student loans, taxes and unpaid court fines (although almost any debt can qualify for garnishment). Some warning signs that a debt may be at risk for wage garnishment include very late payments, multiple attempts from the creditor to collect on the debt, multiple returned checks, etc. For the most part, wage garnishment is to creditors as bankruptcy is to debtors – a last resort. If you feel like your debt may be headed for wage garnishment, you may want to consider trying to negotiate a settlement with your creditors. Our attorneys are skilled at negotiating large reductions in debt without bankruptcy.

Another thing – a private creditor can’t garnish your wages without first having obtained a court order or judgment against you. Before a judgment can be entered against you, you should be served with a summons and complaint, which describe the action being taken against you and the date and time of your court date. Whatever you do, do not ignore the court date! Failure to file a timely response and show up on the day of your court date can result in a default judgment being entered against you. If you’ve been served with a summons, please contact us immediately for a free consultation.

Can I stop it, once it has started?

Ordinarily, wage garnishment continues until all of the obligations of the debt are paid in full. However, in some circumstances, you may be able to have your garnishment released, or at the very least, reduced. For more information on how to stop wage garnishment, contact the attorneys at McCarthy Law today. One of our experienced attorneys will be happy to explain to you your options.


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