Americans are experiencing record lows when it comes to their financial satisfaction, with 43 percent planning to add to their debt over the next six months. People relying on credit cards to bridge the gap between what people need and can afford can often result in a slippery slope, leaving people in worse financial shape.
If you get into too much debt, you may find creditors harassing you, potentially wanting to garnish your wages for amounts owed.
But, knowing your rights when it comes to debt, creditors, and wage garnishment can help you navigate your way to brighter financial times. Keep reading to learn about four things about wage garnishment.
- What is wage garnishment?
Wage garnishment is a legal process requiring your employer to withhold a specific amount of your paycheck and send that portion to a creditor until your debt is paid.
Commonly, your wages could be garnished for child support, student loans, back taxes, or consumer debts, such as credit cards. However, you have rights regarding garnishment, such as how much of your paycheck can be garnished.
- How does wage garnishment work?
Most wage garnishments are court-ordered. For example, if a creditor wants to garnish your wages for debt payment, the court will need to grant the garnishment. If granted, the court will typically send a notice of the garnishment to both you and your employer. Your wages will then be garnished within five to thirty days after the notice date.
Your wages will continue to be garnished until your debt is paid, along with any interest and court fees.
Other debts, such as student loans or child support, don’t necessarily need a court order.
3. Can all types of income be garnished?
According to law, the following types of income can be garnished:
- Bonuses, including sign-on bonuses
- Payments from employer-provided retirement or disability plans
However, some types of income are exempt from garnishment. For example, Social Security payments cannot be garnished for consumer debt, such as credit cards. However, Social Security payments can be garnished to pay for debts owed to the federal government, like federal taxes, or back child support.
4. How much will your wages be garnished?
The amount of your wage garnishment depends on the debt you owe. Here are some examples of federal garnishment limits based on different debt types:
- Consumer debts (such as credit cards and medical debt): Either 25 percent or the amount by which your weekly income exceeds 30 times the federal minimum wage ($7.25/hour in 2022) – whichever is less.
- Federal student loans: Up to 15 percent of your wages.
- Child support and/or alimony: Up to 50 percent if you’re supporting another child or spouse (not subject to the garnishment order); otherwise, up to 60 percent. Additionally, if you’re more than twelve weeks in arrears, another five percent can be garnished.
In addition to the federal limits, your state may have limits as well. An experienced debt management attorney can determine what applies to you.
Hiring an Augusta, Georgia Debt Management Lawyer
Finances – and debt management – can be overwhelming and stressful. Avoid the stress and enlist the help of a debt management attorney in Augusta, GA. The Law Firm of Seymour and Associates, P.C. can help you create a debt management plan that will fit your financial needs and your budget. With the right debt management plan, you can avoid wage garnishment – and we have the legal experience you need on your side to repair your finances.