What Is Wage Garnishment? What You Need To Know
What is wage garnishment? This can be simply described as money taken from your next paycheck to offset a debt in advance. This situation occurs when a judge deliberate on the issue at hand and decides that you owe money. As soon as the ruling is not made in your favor, the other party may request the judge to have the outstanding debt offset from your next paycheck. It only when one experiences the bite from their next paycheck that they get the real picture on what is garnishment.
How much can be taken from your paycheck?
A certain percentage of your disposable earnings (earnings after tax) are considered. Usually about 25% on your disposable earnings are remitted off offset your creditors. In some states, there are some controls to this wage garnishment. For instance, in Ohio if one creditor gets the opportunity to do so, no other creditor has the authority to request for any further garnishment over a certain period of time; usually 30days. With this, it is better to know what is garnishment so that you can avoid it.
Exemptions on wage garnishment
Not all payments received by the individual are subjected to wage garnishment. There are some cash payments, which do not qualify for garnishment. These include workers compensation payments, disability assistance payments, unemployment compensation benefits and a few others. The stipulations vary from state to state on what is wage garnishment.
Is there any notification before garnishment?
It takes a period of between 15 to 45 days for the courts to come to a decision on whether you will face garnishment on the money that you owe a certain party. If the judgment given is unfavorable to you, the creditor immediately sends a letter within which they demand payment. Where the creditor receives no response either verbally or in writing, your employer shall give you an Order and Notice of Garnishment, a Request for Hearing and a Notice to Judgment Debtor. This documentation will be conveyed to you before any money is taken from your next paycheck.
The Notice to Judgment Debtor reveals that a certain sum of your expected earnings shall go to your creditor. The same document also confirms that the right to retain a certain sum from your earnings is guaranteed. Also in this document, there is a brief outlay on how the sum was arrived at. The individual is also granted the opportunity to be heard in case they do not find the amount being deducted from their paycheck as being reasonable.
Can wage garnishment be avoided?
Contact the creditor that has received a ruling in their favor. You might both come to a mutual understanding on a payment plan. Some might even be willing to forego on some of the amount owed. When such a deal is agreed upon, ensure that it is drafted in writing and both parties should sign it accordingly. After 15 days to receiving the ‘Notice of Court Proceedings to Collect Debt’, pay the creditor the amount owed. You may also appoint a trustee to collect the garnished wages and divide it among your creditors until debt payment.
What makes wage garnishment unpopular?
Knowing what is a wage garnishment is important so that you can know what to expect. Your employer will be tasked with extra paperwork, which might consume a lot of time. Most employees try not to let their employers know when they are experiencing financial difficulties. It might shed some negative light on your organizational skills. A way of alleviating this convenience is by employing a debt counseling service to offset your bills. Employees who frequently have to wage garnishments may be dismissed, and there is no legal protection to prevent that.
How to avoid wage garnishments in future
You may contact consumer credit counseling services, which will assist you in debt scheduling. This agreement requires you to pay a portion of your income to the agency, which then transmits it to the respective creditors. The agency pays off your debts to your creditors until all the debts are settled. Having such an arrangement ensures that you do not have to worry again about what is a wage garnishment.
My name is Craig R. Chlarson. Whether you are seeking to eliminate your debt, typically through a chapter 7 filing, or whether you are seeking to reorganize your debt, typically through a chapter 13 filing, or even if you have basic bankruptcy questions, call me today. I can help you.
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