A guide to free and low-cost legal aid, assistance & services in Alabama
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Since 1988, all new or modified child support orders include an automatic wage withholding order. It is illegal not to pay the money withheld for the earnings withholding order to the sheriff. Your duty is to pay the money to the sheriff, who will pay the money according to the law.
A Maryland Appellate Court decision, however, ruled that this law is invalid if the $145 prong results in a garnishment amount that is greater than that which is allowed by federal law. Therefore, if a judgment creditor tries to garnish your wages under the formula and the amount exceeds what is allowed under federal law, you may challenge the amount. The garnishee must inform the debtor each pay period of the amount withheld and the method used to determine the amount. The U.S. Department of Education, or any agency trying to collect a student loan on its behalf, can garnish up to 15% of your pay if you’re in default. But you can keep an amount that’s equivalent to 30 times the current federal minimum wage per week. No lawsuit or court order is required for this type of garnishment; if you’re in default, your wages can be garnished. Disposable earnings are the monies paid to the employee after you take out the deductions required by law.
Wage Garnishment Procedure
If the debt is an Internal Revenue Service levy, a court order is not required. If you’re required to maintain health insurance coverage for your child, the payment for that will be deducted from your paycheck as well. The IRS may serve the Final Notice in person, may leave the notice at the taxpayer’s home or usual place of business, or may send it to the last known address by certified or registered mail. The IRS is required to send the Final Notice to the last address known to the agency. The taxpayer does not need to actually receive the notice for the notice to be effective. Those taxpayers may not realize they are in danger of receiving a levy until their wages are actually garnished. The court will send notices to you and your bank or employer, and the garnishment will begin in five to 30 business days, depending on your creditor and state.
If you default on payments for federal student loans, federal law allows your loan holder to garnish up to 15% of your disposable pay without taking you to court. The garnishment can continue until your loan is paid in full or your account is removed from default. Wage garnishment is a legal technique used to collect money from a person’s paycheck in order to pay a debt.
Wage garnishment for credit cards and other consumer debts
The paperwork that you would file with the Clerk of Court is called a Notice of Claimed Exemptions. You can go to our Notice of Claimed Exemptions form https://accounting-services.net/ at the bottom of this article. The Notice of Claimed Exemptions includes a worksheet to help you figure out how much of your wages are exempt.
You might be able to get on a more manageable payment plan that’s managed by the counseling organization rather than the creditor and the courts. Debt consolidation or refinancing involves taking out a new loan to pay off your existing Wage Garnishment loans. It’s going to be difficult to qualify for a new loan if you’ve fallen so far behind on your bills that your wages are being garnished. Don’t stop garnishment too soon, even if it appears the balance has been paid.
§5-105. Limitation on garnishment
Check the table below to see how a wage garnishment might affect your paycheck, depending on how often you get paid. Under federal law, your employer cannot fire you for a wage garnishment. However, if you have multiple garnishments, or a single creditor has garnished your wages for two or more debts, you are no longer protected against retaliation. If the support garnishment is taking more than 25 percent of disposable earnings, we cannot honor the commercial garnishment. By federal law, child support has priority over commercial garnishments.
Can a garnishee order be issued illegally?
Garnishee orders are illegal if they are issued in a remote jurisdiction, and the law allows you simply to stop paying and recover anything you paid in settlement of these illegal orders, plus interest.
Different rules, as well as different legal limits on how much of your paycheck can be garnished, apply to various types of debt. In most cases, a creditor can’t garnish your wages without first getting a money judgment against you. The creditor has to file a lawsuit in court and either obtain a default judgment (an automatic win because you don’t respond to the suit) or prevail in its case. After the creditor gets the judgment, it sends documentation to your employer, typically through the local sheriff.
How is the employer notified?
Review state law, ideally by working with an HR expert or legal counsel experienced in wage garnishment state laws, which can vary widely from jurisdiction to jurisdiction. There can be complexities regarding applicable regulations depending on the state from which the court issued the order, where your company is based and the state in which the employee resides.
Because garnishments are usually the last resort to collect debts and show a debtor’s unfavorable repayment history, they can harm an individual’s credit rating. If you want to protest a wage garnishment, you must file papers with the court to get a hearing date.
At that time, you have the right to file a petition with the Board of Appeals within the statute of limitations. A debtor is a company or individual who owes money to a lender and is also often referred to as a borrower.
