Q&A: Is It Legal for Creditors to Garnish My Wages?
Do you have a judgment on one of your past due accounts and now creditors are saying they will garnish your wages?
If a credit card or debt collection company is unsuccessful in recovering a debt owed, then they may file a lawsuit against the consumer/debtor in an attempt to recover the monies owed. A judgment will allow the creditor to collect funds directly from the debtor’s paycheck, through the employer, until the amount owed is satisfied. Private and government organization can garnish an employee’s wages in order to collect on a majority of unpaid debts.
This can be very frightening and stressful, as you may not know who to turn to to get the best possible help in resolving the judgment or lien.
Here is some helpful information if you have or are about to have your wages garnished.
How/Why are my wages being garnished?
Once a judgment is granted by the court, the creditor has a few options to enforce the judgment and collect the money. One way is garnishment of your wages (also known as income execution). If you owe child support, back taxes, or student loans, your creditors can sometimes garnish your wages without a court order. When a wage garnishment is in place your employer holds back some of your wages and gives the money directly to the creditor through the Sheriff or Marshall.
Limits on Wage Garnishment
In New York State, creditors can garnish up to 10% of your gross wages or 25% of your disposable income! With some types of debts creditors can take even more. If you make less than 30 times minimum wage you are exempt from income execution. Note that some types of earnings are considered exempt funds. This includes social security checks, retirement monies, disability and child support. In the majority of states, interest may be charged on a judgment, either at any rate spelled out in state law or at the rate described in the contract you signed with the creditor. Additionally, the judgment may include court costs and attorney fees. Note that your employer will find out if the matter remains unresolved. However, it is unlawful to fire you because of a wage garnishment.
Can I challenge the garnishment?
You may object to the garnishment or the amount of money that is being garnished. To do so, you must file a Claim of Exemption with the court that issued the underlying garnishment. Don’t just ignore the problem at hand. Once the creditors garnish your wages, they can continue to collect for 10-20 years, depending on your state. For this sole reason, it’s advised to try and avoid receiving a judgment in the first place. Your best option when a debt gets that far is to seek professional help. An attorney may be able to prevent the garnishment and resolve the matter for you. Our suggestion is to be proactive about seeking help and never wait until you get to the garnishment stage.
Wage garnishment can be scary and stressful. If you have been garnished it’s best to try to resolve the debt as soon as possible. In some cases, dealing with wage garnishment may be too complicated or time consuming to handle on your own. If this is the case you should consider seeking help. Here at Tayne Law Group, we are proficient in resolving judgments in a number of different ways. Our experienced staff can talk to you today about how we can get your judgment or lien thrown out or resolved through settlement. Contact us today at 631-470-8204 for a free, no obligation phone consultation.