A wage garnishment is a court order which is sent to your employer instructing them to withhold a specific sum of money from your weekly or monthly paycheck to pay a debt you owe. Experience has shown that the vast majority of wage garnishments ordered are in relation to child support, alimony payments or IRS tax debts. You\’ll also find a wage garnishment referred to as an \”execution law\” in some states, but most people simply refer to them as garnishments instead.
In most situations a wage garnishment order will result in your creditors getting roughly 10% of your wages to service the debt you owe them. There are specific situations though where your creditors could be entitled to a far larger slice of your paycheck – it all depends on the type of debt you owe and how much that total debt is.
When Can A Creditor Garnish Your Paycheck?
The good news is that creditors can\’t do this without getting a court order first, and are also able to provide evidence to the court that you do actually owe them money in the first instance. So in cases where people you don\’t actually owe money to are threatening you with a paycheck garnishment you don\’t really have anything to worry about. Generally speaking even in cases where you do owe a particular company money – typically credit card or store cards – they will still need a court order to take money directly from your paycheck.
Wage Garnishment Limits
Obviously there are certain limitations put in place on wage garnishments to provide you with enough money to live on after having paid your debt. The amount which can be deducted will depend on whether it\’s a state or Federal garnishment. If you take Federal law as the first example this allows up to 25% of your disposable earnings to be deducted from your paycheck. If you look at the state laws relating to New Jersey you\’ll notice that on average around 10% of your disposable earnings.
It\’s worth mentioning here that in the case of exceptional debts, such as child support, that up to 60% of your disposable earnings can be garnished from your paycheck to pay your debt, especially if you\’re currently in arrears on your child support, taxes or student loan payments.
Job Termination
Certain employers dislike having to deal with wage garnishments, and may attempt to fire you from your job as a result. The good news is that both state and Federal laws exist to protect you from unfair dismissal from your current job because of any issues surrounding your paycheck being garnished i.e. in New Jersey your employer simply cannot fire you because of a wage garnishment issue.