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Friday, March 28, 2014

How to stop wage garnishment

By Phil Steel
Wage garnishment
Wage garnishment may be limited to a percent of income

“Wage garnishment occurs when an employer is required to withhold the earnings of an individual for the payment of a debt in accordance with a court order or other legal or equitable procedure…,” The United States Department of Labor informs. So is wage garnishment a permanent curse, or is it a temporary head-ache?  When exactly, does ‘wage garnishment’ stop?  Wikipedia answers the question in these words:“Wage garnishments continue until the entire debt is paid or arrangements are made to pay off the debt. Garnishments can be taken for any type of debt, but common examples of debt that result in garnishments include: child support; defaulted student loans; taxes and unpaid court fines.” It is the responsibility of organizations and companies, whose employees have been served with such a notice, to correctly calculate the amount of garnishment and deduct it from the employee’s salary, till such time- that the garnishments are paid in full.

The adverse effects of wage garnishments

Wage garnishment has some obvious adverse effects! While it spoils your impression in front of your employer, unfortunately it does not simply stop there! If you do not want ‘wage garnishment’ to drill a permanent hole into your earnings, you need to find ways to stop it.  According to thenest.com- there are two major ways in which wage garnishment can impact you badly. Among these is the fact that-it can, not only lead to your termination, but at the same time -can also lower your credit scores!
“Since the employer must make deductions from your paychecks, liability for failure to comply with a garnishment order falls on the employer's shoulders. This is why your employer can terminate you if you receive more than one garnishment order,” ‘thenest.com’ informs. Likewise, it also notes that - since “garnishment orders are a matter of public record…credit reporting agencies can find out about them. Because garnishment is a result of debt default, it has a negative impact on your credit score. If you have more than one garnishment order, it's safe to say credit reporting agencies will hear about every one of them.”

Ways to stop wage garnishments

Seek exemptions to stop wage garnishment

Stop wage garnishment
Filing for bankruptcy may curtail wage garnishment
For those who are worried about their wages being garnished, or those whose wages have been garnished, relief does exist in the form of -wage garnishment exemption provisions! “Wage garnishment exemptions are a form of wage protection that prevents the garnishing creditor from taking certain kinds of income, or more than a certain amount of your wages.  

The idea is that citizens should be able to protect some of their wages from creditors in order to pay for living expenses. Accordingly, each state’s laws provide you with various exemptions that you may use to protect your wages,” explains the legal website- nolo.com. “Depending on your situation, you may partially or fully protect your income. Generally speaking, ordinary creditors cannot garnish the following types of income: social security, disability, retirement, child support, and alimony,” it informs.

Use the percentage provision to stop wage garnishment

When an individual’s wage is garnished-there exist provisions in law made by every state-that stop a wage garnishment order, from deducting his/her full salary to repay debts. According to ‘thenest.com’, “Generally speaking, creditors can't garnish more than 25 percent of your gross earnings after mandatory deductions. In other words, if you pay mandatory union dues, Social Security, and state or federal taxes, your creditor can't take more than 25 percent of whatever is left of your earnings. If you have more than one garnishment, total garnishment deductions still can't exceed 25 percent of gross earnings after mandatory deductions.”

LaToya Irby elaborates on the subject in more precise terms on About.com.  “The maximum amount that can be garnished from your paycheck is the lower of the following: 25% of your disposable income if it’s greater than $290” and “Any amount greater than 30 times the federal minimum wage: $217.50,” she states.

Filing bankruptcy to stop wage garnishment

If you are really determined to stop wage garnishment and all your other options have run out, filing bankruptcy may be your only saving grace! On filing it- “the law immediately begins protecting you from creditors by imposing an "automatic stay." The stay orders creditors to stop any and all collection activities going on against you. Garnishment, thus, is ceased upon filing. If you really need the garnishment to stop right away, you may even want to consider an emergency filing,” suggests alllaw.com.

About the author: This article was written by Phil Steel, an experienced researcher and writer on finance, currently investigating ways to stop wage garnishments.
Image license: 1. Keith Ramsey, CC BY-SA 2.0  2. :MyBlogGuest