WHAT IS WAGE GARNISHMENT? HOW DOES IT WORK?

The phrase “garnishing” basically means adding a little bit of other food to decorate it. It’s not all that different from this definition to garnish pay. The sole distinction is that garnished food looks appetizing, but garnished wages do not. Wage garnishment is the practice of deducting money from an employee’s paycheck or income in order to pay off debts. The wages of all salaried employees may be withheld. 

The Consumer Credit Protection Act’s (CCPA) wage garnishment provisions protect employees from termination by their employers when their wages have been deducted for a single debt and provide a weekly cap on the amount of pay that can be deducted. 

GARNISHMENT LAW

The federal wage garnishment legislation protects employees by limiting the garnishment procedure. Title III of the Consumer Crediat Protection Act allows for this. Employers who violate Title III may be fined and/or imprisoned.

SO BASICALLY THERE ARE DIFFERENT TYPES OF WAGE GARNISHMENT

 According to federal law, this must always be paid first. Furthermore, the law requires paycheck garnishment for alimony, child support, and other court-ordered family support. This type of garnishment is known child support. The wage garnishment category includes IRS tax obligations and federal loans secured by the government. This is known as Federal debt. Private entities may be entitled to garnish earnings after resolving federal and state obligations. This type is known as Credit Card Debt. Employers may withhold salaries for unpaid state taxes. Child support and federal obligations must be resolved first before state wage garnishment laws may be applied. This type is known as state debt. 

Garnishment is a means of collecting money from someone who owes money. When an employee owes money, a court or government agency may compel you to deduct money from his or her paycheck. The withheld wages are used to pay off the employee’s obligations. The majority of garnishments are court-ordered. Garnishments for outstanding bills can also be ordered by the IRS, state tax collection agencies, and other non-tax government entities. 

Regardless of whether you have the money to pay the back taxes you owe, you must file all required returns. File your past-due return in the same manner and at the same address as your current return. Tax advisers, usually referred to as Professional tax consultant, provide both people and corporations with a range of tax advisory services. They could create tax returns, calculate taxes due, and stand in for customers during audits. They will educate youon the tax laws and rules that affect their money as a qualified tax counsellor.

WHICH WAGES ARE ELIGIBLE FOR GARNISHMENT?

Hourly earnings, salaries, bonuses and Commissions are wages eligible for garnishment. 

HOW DOES THIS WORK? 

Wage garnishment occurs when a creditor files a ‘Request for Garnishment on Wages,’ also known as Form DC/CV65, with the court. Following the submission of the request, the paper is signed by a court clerk or judge, creating the Writ of Garnishment. The creditor must pay court costs in order to file a Request for Garnishment of Wages. Fees for serving the garnishment writ may also be imposed on the garnishee. In addition to interest, most judgments that a debtor owes a creditor may also include court expenses and fees. As a result, communication between the garnishee and the creditor is critical in order to verify that the correct amount is paid to the creditor. Garnishees have 30 days from the date of service to reply to the Writ. The garnishee must report if the debtor is working, the amount of pay they receive, and any previous wage garnishment. Garnishees who do not reply to the Writ of Garnishment will very certainly be found in contempt of court. After receiving the Writ, the garnishee must compute the amount of the debtor’s garnishable earnings every pay period. Wages must be withheld in such cases until either the judgement is fulfilled or the garnishee is directed to discontinue withholding. When the debtor’s pay period closes, the garnishee must report the amount wage garnished to the creditor or their attorney. Another garnishment must be handled in the same manner, but it should not be paid until the previous one is paid in full. Once the first garnishment is fully paid, the second will commence. The creditor who is receiving wage garnishments must request for payment of the judgment’s interest. Following that, the debtor assessed the attorney’s fees and court expenses, followed by the judgment’s main amount. The garnishee must provide the debtor with a written account of the amount taken and the procedure used to calculate it throughout each pay period. This data may be collected from a paycheck. When a creditor receives payment from a garnishee within 15 days of the end of the month, they must provide the garnishee a statement outlining the monies received.  Creditors are obligated to keep copies of these statements for 90 days after the garnishment is lifted, but they are not compelled to submit them with the court. The court or any party may review these statements at any time they desire. 

WAGES WORTH  THE GARNISHMENT

 Wage garnishments should be based on an employee’s disposable earnings, according to Title III of the federal Consumer Credit Protection Act, or the CCPA. 

GARNISHMENT LIMITS

Generally, maximum garnishment limitations do not apply to bankruptcy court orders or outstanding federal or state taxes. That is, there is no limit to the amount that can be garnished for unpaid taxes and bankruptcy court orders. Furthermore, declaring bankruptcy does not provide relief from IRS wage garnishment.

Author

Mr. Joshua A. Webskowski

Joshua specializes in successfully resolving cases in all areas of tax resolution including liens, levies, & other IRS collections cases.

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