Wage garnishment is upholding a part of your income by your employer to repay your debt. Wages can be garnished by your employer only when there is a court order to garnish them for repayment of your debt.
Wage garnishment is a consequence of the debtor losing a debt case. This happens when you are unable to repay a debt, the creditor sues you and wins the case. The court then advises your employer to garnish the debt payments from your wages.
There are different laws about wage garnishment. State laws may vary from federal law in wage garnishment and whichever law that results in lesser amount to be garnished from your wages has to be executed. For example in some states only 15% of the wages can be garnished.
State laws are not applicable for federal debts. 10% of your salary or disposable income can be garnished to cover federal student loans according to the department of education. Federal agencies and their collectors are eligible to garnish 15% of your wages for non tax federal loans.
The normal incomes that can be garnished are wages, salaries, other monthly wages, commissions and bonuses. Retirement income and pension can also be garnished. However, income like restaurant tips are not considered income and cannot be garnished. If you are supporting a child or spouse, 50% of your income can be garnished. If you are not supporting a child or spouse, 60 % of your income can be garnished. If your payments are 12 or more weeks old an additional 5% can be garnished.
Your employer cannot fire you if a debt of yours attracts wage garnishment. If more debts are garnished there is a risk of your employer throwing you out of job. In case of an improper wage garnishment by your employer or if your employer has knowingly violated the law while laying you off, department of labor can take action against him.
The Fair Debt Collections Practices Act (FDCPA) protects consumers from unethical practices employed by third party debt collectors for collection of debts. The FDCPA is enforced by the Federal Trade Commission (FTC) to ensure the practices of fair debt collection. However, third party collectors engage in unfair practices and may threaten you with wage garnishment. Under the FDCPA you have a right to sue the third party collector who threatens you with wage garnishment. Unless passed by a court of law, wages cannot be garnished nor can anyone threaten you with such an act.
To avoid wage garnishment you should act early. If you are falling behind on your payment, it is best to contact creditors and agree on a payment plan. If the debts go unpaid, the creditor certainly has a right to press charges. Should he win, court can pass a judgment allowing your employer to garnish your wages.
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The Fair Debt Collection Practices Act offers protection from illegal and unethical tactics of the debt collectors. A clear understanding of debt collection laws under the FDCPA will entail you to the power to fight the third party debt collectors.