The term ‘wage garnishment’ is enough to strike fear in the heart of just about anyone. Everyone relies on their income to pay for daily expenses including their mortgage, utilities, and groceries. So, learning that a portion of your paycheck is going to be withheld is very scary. Although wage garnishment is a legal option for debt collectors and creditors, it does not give them complete power like so many people believe.
Wage garnishment is a very misunderstood process and it is natural to have many questions, particularly if you have just learned that you may lose a portion of your income. Below are some of the most frequently asked questions about wage garnishment, and the answers to them.
What Is Wage Garnishment?
A wage garnishment is a legal procedure in which a portion of a person’s paycheck is withheld due to the non-payment of a debt. Employers withhold a portion of the debtor’s paycheck and send it to the creditor or debt collector. To obtain a wage garnishment, a debt collector or creditor must go through a legal process and obtain a court order to have a person’s paycheck withheld.
Although wage garnishments obtained by creditors are the most common type of wage garnishment, there are others as well. The IRS or a Florida tax collection agency can also obtain a wage garnishment when someone has not paid their taxes. Federal agencies such as the IRS may also obtain an administrative garnishment for debts owed to the federal government that are not taxes.
When a person volunteers to have their employer withhold a certain amount of their income to repay a creditor, that is considered a voluntary wage assignment. As such, they are not considered wage garnishments. Other deductions, such as payments made to the employer for uniforms or other items necessary for a person’s employment are also not deducted from a person’s gross income when calculating the wage garnishment.
What Rights Do Consumers Have?
It is important that anyone in fear of a wage garnishment understands that they have rights. The Consumer Credit Protection Act allows creditors to take only a certain amount of an employee’s income. The Act also prohibits employers from firing employees when their check is garnished for just one debt.
Who Does the Law Apply To?
The Consumer Credit Protection Act is a federal law, meaning that it applies to all Americans in every state. The law also protects all personal earnings a person receives. This applies not only to paychecks, but also to pensions and other retirement accounts. In most cases, tips are not considered personal earnings under the law.
Can My Employer Fire Me for a Wage Garnishment?
Employers generally do not like wage garnishments. The responsibility of withholding an employee’s income and sending it to the debt collector is theirs, and employers generally do not want to deal with the additional hassle. As such, it is natural for employees to worry if their employer will fire them over a wage garnishment. The answer is that it depends.
The Consumer Credit Protection Act makes it illegal for employers to fire an employee over a single wage garnishment. However, if an employee has two or more distinct garnishments for two or more debts, the law does not prohibit an employer from firing an employee.
How Much Can Creditors Withhold?
The income amount that is subject to garnishment is based on a person’s disposable earnings. This is the amount of earnings remaining after deductions required by law, such as taxes, are subtracted. However, other deductions that are not required by law, such as a voluntary wage assignment, are not excluded from an employee’s gross earnings when calculating the amount to be withheld from their disposable earnings.
The law does set limits on how much of a person’s income can be obtained through a wage garnishment. For most garnishments, including those related to an unpaid debt, the law places a limit of either 25 percent of the debtor’s disposable earnings, or the amount by which a person’s disposable income is more than 30 times the federal minimum wage.
If a person makes $217.50 in disposable earnings in one week, those earnings cannot be garnished. Any income over that amount may be subject to garnishment. When an employee’s disposable income is more than $290, a debt collector may garnish up to 25 percent. If, on the other hand, the pay period incorporates more than one week, a calculation must include multiples of the restrictions on earnings to determine how much income is to be garnished.
Although the above outlines federal law, Florida also has state laws surrounding wage garnishment. Under Florida law, any disposable income that is less than 30 times the minimum wage cannot be subject to wage garnishment. In the event that state law deviates from the federal law, creditors and debt collectors must garnish the smaller amount.
Are Wage Garnishments for Child Support and Alimony Different?
When a person’s wages are garnished for child support or alimony, the law is slightly different. For these debts, an employee may have up to 50 percent of their disposable earnings garnished if they are supporting another spouse or child. If the employee is not supporting another spouse or child, they can have up to 60 percent of their wages garnished.
Do I Need a Florida Debt Defense Lawyer?
Creditors and debt collectors do have a lot of rights when it comes to wage garnishment. However, they also have certain limitations and they do not always want to comply with the law. For this reason, it is crucial to speak to a Fort Lauderdale debt defense lawyer who can help.
At Loan Lawyers, our knowledgeable attorneys will fully explain how wage garnishment works, and answer any questions you have. We will always work in your best interests and ensure your rights are upheld. Call us today at (954) 807-1361 or contact us online to schedule a free consultation and to learn more about how we can help.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation and find out more about our money back guarantee on credit card debt buyer lawsuits, and how we may be able to help you.