My husband's student loans are seriously past due for various reasons. PHEAA has stated that they can garnish his "disposable" wages at 10%. Neither of us are clear on what is termed "disposable" wages. If you can clear this up for us it would be greatly appreciated. Sincerely. Jean W
Dear Jean:
Disposable wages is the amount of earnings left after 'legally' required deductions have been made for federal, state and local taxes, Social Security, unemployment insurance and state employee retirement systems. The bottom line is, disposable wages is generally your 'take home' pay, excluding deductions for group insurance, retirement plans or any other non legal deductions.
Dear Susan & Co.,
I just received notice from my payroll dept that 25% of my disposable income will be garnished effective 31 March. I filled out interrogatories but received the news from my employer and was never mailed anything to my home or served so I had time to reply through the courts. It that legal? Also I am a single parent head of household. Can they garnish 25% per pay period to repay this debt.? I will be living at poverty level. How can I contest this? I reside in Colorado Springs, CO. Karen
Dear Karen:
In most states, before a creditor can garnish a debtors wages, the creditor must get court approval. If your wages are being garnished, I can only assume the creditor has court approval and therefore the garnishment is legal. The federal Consumer Credit Protection Act (CCPA) permits a creditor to garnish up to 25% of an employees net earnings.
The provisions of the CCPA are administered and enforced by the Department of Labor, Employment Standards Administration, Washington, DC. If you would like further clarification of this law and possibly contest this garnishment, you can contact them at (202) 219-8743. Good luck.
I understand that garnishment can only be up to 25% of wages. If you already are having child support garnished from your wages in the amount of 30-35% can another 25% be garnished from someone else? The person I am referring to has child support garnished from his wages. He also owes $1400 to state unemployment due to a claim that he lost. They are now threatening garnishment if this amount is not paid in 30 days. He makes a net of $270 every other week after child support is taken out. How much can the employment office take on top of that? Ginger
Dear Ginger:
You are correct in stating the garnishment can only be up to 25% of wages, except for child support. Title III of the Consumer Credit Protection Act (CCPA) governs how much of an employees wages can be garnished. By this provision of the CCPA, this 25% limit applies regardless of the number of garnishment orders received by an employer.
Dear Susan & Co.,
If monetary judgment is obtained against military personnel in state court civil proceeding, can he be garnished? Matthew
Dear Matthew:
It is my understanding, effective April 3, 1994, wages of the military may be garnished. A judgement must be obtained in the state or county in which the debtor works and service must be made on the payroll office in the location where the debtor works. The only exception to this garnishment might be if the service member is stationed a state that prohibits garnishment.
Dear Susan & Co.,
Recently I had a credit card balance turned over as an unpaid debt. The last words I had with the creditor was that whoever would attempt to collect this would have the right to garnish my wages because I am working. Is this true? Where can I go to find out exactly what my rights are? Thanks, GT
Dear GT:
Yes, perhaps a creditor could garnish your wages to collect on an unpaid debt. Whether they can depends on your specific state laws. Each state establishes their own garnishment provisions. Some states do not permit any type of garnishment except for certain debt such as IRS taxes, government guaranteed student loans and child support. If garnishment is permitted in your state, generally the creditor must obtain a judgment against you in civil court before they can garnish your wages.
To determine what the laws are in your state and whether this creditor can garnish your wages, you will need to seek the services of an attorney. You can also call your state Attorney General office for clarification. Good luck.
Dear Susan & Co.,
Can more than one party garnish your wages at the same time, up to the percentage allowed out of your income? Also, can a debt incurred by my new husband be garnished from my wages. Lastly, can a party attach to my income tax refund? LB
Dear LB:
These are all legal questions that I am not capable of answering for you. You will need to seek the services of an attorney for answers. Each state has their own restrictions on garnishment of wages and only an attorney from your state can give you correct answers.
Dear Susan & Co.,
My father-in-law, in the Baltimore, MD area, owes money to the IRS. They have recently started garnishing his wages. I believe that he started filing bankruptcy once before, but never finished the process in the hopes that he might one day restore his credit.
He claims that a $1500 tax bill from 1993 has ballooned to a $5000 judgment in penalties and interest. Any recommendations? Mike
Dear Mike:
The only recommendation I can make is to accept the fact that your father-in-law must pay the IRS what they say he owes. Fighting or delaying payment to the IRS ends up being costly and non-productive.
Even filing for bankruptcy won't wipe out the bill to the IRS since taxes are not dischargeable in bankruptcy.
Dear Susan & Co.,
What is the maximum allowable garnishment of wages in Tennessee? How is that amount calculated (based on gross, net, etc.)? Do you have to be warned in writing first? S
Dear S:
Since I'm not from Tennessee, I'm not familiar with their garnishment law. I would suggest you call your state's Attorney General Office, a legal assistance organization or a local attorney for this information.
Dear Susan & Co.,
I have serious financial problems that I am trying to correct, but if seems impossible to get everyone paid quickly enough. I am in a continuous state of panic, which makes it much harder to deal with this problem effectively.
One of my greatest concerns is that a creditor will attempt to garnish my wages and thereby inform my employer of my financial distress. If that happens, I will likely find myself with no job, no income, and unable to pay off these debts - even slowly. I have several creditors (mostly credit card lenders) who are several months behind. (I have been making monthly payments, but I remain delinquent because the payments are too low.) I fear that I have exhausted their patience, although I am paying all that I have, and that they may be ready to take legal action.
Will I have any advance warning if my creditors decide to garnish my wages?
Will I have an opportunity to prevent garnishment? Do creditors understand that wage garnishment lessens their chances of collecting because it seriously threatens the debtor’s employment? Jen
Dear Jen:
You didn’t indicate what state you live in and each state has different laws concerning garnishment. In North Carolina, Texas, South Carolina and Pennsylvania, wages may not be garnished to pay consumer debt.
Other debts, such as child support, student loans and IRS debt can be garnished. On these debts, you will receive notification before any garnishment is done.
No one can garnish wages without court action. You will receive notice of any court action to be taken against you and you will have the right to defend yourself in court.
Creditors do not care about employment. They have their own set of criteria concerning collections of overdue debt. They will follow their guidelines.
In states where garnishment is legal, there is normally a limitation of 20% to 25% of net resources or disposable income. Consult legal aid or some type of legal hotline in your area to get answers pertinent to your location?
Your company will likely have a policy about garnished wages. It would be helpful for you to know their position and it may serve to relieve some of your stress.
Thanks for writing in and good luck.
Dear Susan & Co.,
Can wages be garnished for a VA foreclosure if you work for the U.S. government? Woody
Dear Woody:
Yes. Up to 15% of your wages can be garnished to repay the foreclosure balance you owe on a VA insured mortgage if you are employed by the U.S. government.
If you would like more information on the process, you can call the Debt Management Center for VA Foreclosures in St. Paul MN at 1-800-827-0648.
Good Luck.