Creditor Wage Garnishment

If you owe credit card debt and a creditor threatens you with wage garnishment, you may be wondering what that means exactly. If you've fallen behind making payments to your creditors, they may take you to court and sue for a judgment that allows them to begin wage garnishment. Normally you would need to be about six months behind making payments in order for a creditor to take you to court. A wage garnishment allows the creditors can collect the money you owe them by taking a portion out of each of your paychecks. It's legal in most states, and used typically as a last resort by debt collectors. Usually, settling credit card debt or setting up a payment plan is easier for them.

Depending on the size of your debt, the creditor may take you to small claims court or civil court. If the creditor wins the lawsuit in court, they will obtain a “judgment”. The judgment gives the creditor more legal options for collecting the debt you owe them, including wage garnishment.

If the court grants the Writ of Garnishment, your employer will be sent papers and get notified by the sheriff to take a certain percentage of each of your paychecks to send to the creditor until the total amount owed has been paid off. The money is sent to the creditor before you even receive your pay for the pay period and you will receive whatever is left from each check after the creditor is paid.

Each of your paychecks is exempt from garnishment up to 30 times the federal minimum wage (around $150 per week). This is money that cannot be touched by garnishment. Other exempt sources of income include:

-Temporary Assistance for Needy Families and other cash welfare benefits
-Supplemental Security Income
-Unemployment Compensation
-Student loans
-Social Security
-Most pension and retirement benefits

Additionally, any savings you have that come from these exempt sources of income and can be proven to come from these exempt sources of income will also be excluded from wage garnishment.

Before your check is garnished, you will be given a withholding order that contains the address of the clerk's office where you can file an exemption from the wage garnishment. If you do this, you have the opportunity for a court hearing during which time you can show your living expenses, your previous attempts to pay the debt, and hopefully get a reduction in the amount of money the creditor intends to garnish.

If you owe money to the IRS, they do not need to sue you to begin wage garnishment. They're allowed to take all but $116 from each of your weekly paychecks, so the IRS is one creditor you never want to skip out on payments to!