Wage Garnishment
Wage Garnishment
A friend once said to me, “If you ever feel like no one notices you, stop paying your bills”. While we would definitely not recommend that you stop paying your bills, the idea behind his comical advice is sound. If you stop paying your bills, your bill collectors are going to come knocking. If you don’t make contact with a bill collector when you are behind on a payment, they may do worse than annoy you with constant phone calls, they may go after your wages.
Wage garnishment is when someone to whom you owe money legally has it taken from your paycheck. This can be done by almost anyone who you owe money to. If you owe money on a student loan, child support, back taxes, credit card companies, loan companies, and more. The garnishment is handled by your employer or if they outsource to a company like Vision H.R., an experienced outsourcing Daytona Beach payroll company, and are deducted from your disposable income, meaning whatever is left after the normal deductions that are taken out of your check, such as social security. Luckily, however, there are rules and limitations when it comes to companies placing a wage garnishment against you, as we will discuss in this article.
The first legal aspect of wage garnishment that we will explore is who needs a court order to garnish your wages, and who doesn’t. When it comes to something that deals with the court, or government, a court order is often times not needed. For example, if you do your yearly taxes and end up having to pay money back, yet chose not to, the government can garnish your wages. If you owe child support, and similarly chose not to pay them, the court can garnish your wages without a court order. Finally, student loans have to be paid in a timely manner, or the company that gave you the loan can garnish your wages. Other creditors, such as loan companies or credit card companies, have to go through the court before placing a garnish on your wages. This can also include medical bills that have built up over time.
The second thing we will look into is the legal limits set on wage garnishments. The limitations placed upon it are set by both the federal, and state government. On the federal level, creditors who require a court order can take no more than 25% of your disposable earnings. Depending on where you live, the amount may be lower. Your place of employment also can not take action against you for having a wage garnishment issued against you. This means no getting fired, and no cutting hours. However, if you get more than one company with a wage garnishment placed against you, or one company has more than one garnishment against you for multiple loans, the restrictions your employer has become less and less.
What if no court order is required for your garnishment? Than the laws about how much can be taken from your wages becomes a little bit more complicated. On the federal level, if you owe child support or alimony, you can have up to 60% of your wages garnished! If you are currently supporting a spouse or child that is not involved in the payment, (meaning you have a spouse or child that will not benefit), you can have up to 50% of your wages garnished. If you do not have a spouse or child that is not directly involved in the payment, then up to 60% can be garnished!
For student loans, luckily they can take less than the normal amount in wage garnishment, their limit being at 15% of your disposable income. For back taxes to the government on the other hand, the amount can be rather devastating. The final amount will depend largely on any dependents you claim, and your standard deduction amount. Regardless of the final amount, don’t expect to be going on a vacation anytime soon.
If you are an employer with an employee who has a wage garnishment placed against them and are not sure what to do, you can turn to Vision H.R. to handle it. Vision H.R. has a trained staff of payroll specialist that can handle your ordinary payroll duties, along with things such as garnishments, benefits, and sick leave. Serving as a New Smyrna Beach, Jacksonville, St. Augustine, Deland, and Daytona Beach payroll company that comes recommended by it’s clients, Vision H.R. is ready to handle your payroll.
