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Definition of Garnishment:

Garnishment or wage garnishment is the legal procedure by which the employer is required by a court order to withhold the paycheck of an employee to pay back a debt. The employer is called the garnishee, and they are legally prohibited from firing an employee to avoid the processing of wage garnishment.

Wage garnishment is usually done for child support, paying back student loans, bankruptcy orders, or other consumer loans. This can go on until the debt is paid off or until a settlement is reached. The court would send a notice to the bank or the employer around 5 to 30 days before levying the payment. The Consumer Credit Protection Act sets a cap on the amount that can be garnished, except for unpaid taxes, defaulted child support or student loans, bankruptcy orders, etc. The creditor must obtain a court order for garnishment. The only exception is when the creditor is Internal Revenue Service (IRS), where a court order is not required.

Types of Garnishment

Wage Garnishment: Here, creditors can legally ask your employer to withhold and handover a part of your wage to pay your debts. 

Non Wage Garnishment: Commonly called as bank levy, here creditors can directly levy the amount from your bank account. 

How much wage can be garnished?

According to the Consumer Credit Protection Act, the garnishment amount is the lower of the three:

  • If the weekly disposable income is $290 or more, then 25% is levied.
  • If the weekly disposable income is between $289 and $217.5 (30 times the federal minimum wage $7.25), then the amount above $217.5. 
  • If the amount is lesser that $217.5, no garnishment amount can be levied. 

Disposable income is the gross income minus federal, state, and local taxes and other legal deductions

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