Crucial Information Concerning Wage Garnishment That Can Save You Thousands!

The term wage garnishment is one that elicits fear in many especially those that live in states where the practice is legal. The fear is justified; wage garnishment can be as unexpected as it is painful. Ask people who have received the bad news from their payroll department informing them of a mandatory court order to withhold almost a third of their disposable income due to either unpaid taxes or child support. But the climate of fear need not prevail especially since it is perpetrated by ignorance. There is a way out.

Know your information

In the event that you owe back taxes or child support, and the IRS or whatever state or local governing body is administering the debt cannot find you or get you to respond to their notices, your wages can be garnished. This happens when the IRS or government body or any other creditor for that matter, approaches the courts and sues you to recover the debt. The courts, after establishing that you do indeed owe the debt and that reasonable means of notifying you have been employed, proceed to effect an order to withhold a portion of your wages, usually 25%. There are some states in the US that do not have laws authorizing wages to be garnished. These states are Texas, Pennsylvania, North and South Carolina.

There are laws

To protect the rights of the debtor, wage garnishment is strictly monitored and regulated. It cannot be effected before the creditor first demonstrates that he or she was unable to extract the repayment of the debt through other non-legal procedure. In other words, the creditor must show that wage garnishment is indeed the last resort. The laws also require that the amount being garnished not exceed a particular amount, in many cases, 15-25%.

Debts usually affected

Taxes are not the only debts that can trigger wage garnishment. Child support, student loans and outstanding personal loans can also cause the creditor to sue the debtor and request garnishment. In these tough economic times, the prospects of one's wages being garnished is a frightening prospect indeed. But if you have the right information, there is always the comfort of knowing there is a way out.