ADP Research says that about 2.8% of workers had their wages garnished in January 2024. This number suggests that over 3 out of every 100 working individuals had their wages garnished.

Dealing with debt may be quite hard, especially when creditors can take money right from your salary. Bear in mind that there are only certain legal situations in which wage garnishment can be enforced.

The IRS can withhold money from your paychecks if you owe back taxes, for example. If you don’t pay back your student loans, the Department of Education might take money from your paychecks. If you lose a lawsuit over an unpaid payment, the court can also mandate wage garnishment. These are just some of the scenarios wherein wage garnishment can happen.

Let’s discuss the different ways to handle your finances when you are undergoing wage garnishment 

Understanding Wage Garnishment: The Basics

If you owe money, creditors may garnish wages as an enforcement of collection of debts. It is a legal process that allows creditors to directly take a portion of your payroll, so it is important to understand how it works. 

A court order directs your employer to withhold part of your earnings, causing you to receive a  lesser amount compared to your actual salary. Individuals who have their wages reduced through wage garnishment may feel overwhelmed. You are not alone since numerous individuals have also faced similar issues. 

Learning about your rights can give you power. For instance, there are certain limits on garnishments, and sometimes even negotiations will take place. 

Wage garnishment laws somewhat specify the limit on the amount of wages that can be garnished to satisfy debts under proper wage laws. Both wage laws and wage garnishment laws give workers the right to keep enough earnings for subsistence. According to wage and hour lawyer Esperanza Anderson, wage laws provide protection to employees in the modern workforce.

Understanding the basics of wage garnishment is another way to help you regain even a little bit of control over your money.

Common Reasons for Wage Garnishment

Multiple factors may induce wage garnishments from your pay, and you must know them so you can avoid them. Wage garnishment can be imposed on you when you have unpaid debts, such as a credit card bill or personal loan. If you fail to honor these payments, creditors could request court orders for wage garnishment.

Cases under child support or alimony can also result in wage garnishments, as the courts would want to provide the custodial parent and child with adequate financial help. 

Defaulted student loans result in wage garnishments as you are being encouraged to pay up and comply with your obligations. Keep these reasons in mind to prevent interference with your paycheck.

Legal Limits on Wage Garnishment Amounts

Wage garnishment will definitely affect your finances, but there are limitations on how much can be garnished from your paycheck. The creditor may get 25% of your disposable income or the amount by which disposable weekly earnings exceed 30 times the federal minimum wage-whichever is smaller.

There may be additional laws at the state level, so one must be aware of these local laws. Understanding these limits will set you free to feel great about your choice. 

Knowing your rights gives you a certain self-confidence you need while facing this situation.

The Process of Wage Garnishment

Before proceeding to wage garnishment, the creditor typically will be required to get a decree from the court. Upon receiving this court order, the creditor proceeds to inform your employer of the garnishment. 

The employer must follow this decree and begin withholding a wage portion to repay the debt. This normally entails deducting a stated percentage of your wage as established by the decree. 

You will be notified of the amount being withheld and for what duration. Once garnished, you may feel financially strained. Emotional distress is common among people whose wages are being garnished.

You can try to seek alternative options for repayment with your creditor so you may feel less isolated and regain some control over your finances. 

Steps to Protect Yourself From Wage Garnishment

There are a handful of things to do to avoid wage garnishments once financial difficulties arise. Assess your financial standing and make a budget of your expenses.

Communicate with creditors. They could extend to you an offer of flexible repayment schedules or debt negotiation. If you ever feel like you can’t deal with what is going on, a credit counselor may be able to help. There are many resources and support systems out there.

Check for garnishment exemptions in your particular jurisdiction. It could be possible to apply for protection depending on your income and family situation. 

Never lose sight of your rights. Having this knowledge allows you to seize control and protect yourself financially.