If you have one or more debts that you were sued on due to default, and your creditor’s won a judgement against you, they may seek to garnish your wages. Wage garnishments are also known as wage attachments. If you are hit with a garnishment, your employer will withhold part of your paycheck before it ever gets to you, and this money will be sent directly to your creditors. Several creditors like the IRS, Federal agencies and the like can garnish your wages without ever obtaining a court judgement. All income is fair game for a garnishment with the exception of SSI income and child support income, and even SSI income can be taken by the government if you owe Uncle Sam.
Garnishment laws will vary by state as to how much of your income can be garnished. You may have some recourse as far as how much they can garnish you by raising a formal objection in court due to hardship. Thankfully there are legal limits to how much you can be garnished, but a garnishment can be crippling. Different types of debts have different garnishment rules, such as federal debt vs consumer debt.
With the exception of back taxes, student loans and child support payments, all other debts need a court order for a garnishment to take place. This starts with them needing to take you to court, and winning a judgement on you. They cannot simply file papers and start attaching your wages. If court does decide to allow you to be garnished, creditors for consumer debt are limited to 25% of your wages, or the amount of income that exceeds 30 times the minimum wage for your state, whichever is lower. That is a federal law, but your home state may limit this amount even further.
Where it gets sticky and hairy is employer retaliation. If you only have one judgement that resulted in garnishment, your employer cannot retaliate against you, you cannot loose your job, or be demoted from your position due to your garnishment. However if you have 2 or more garnishments active at one time, your employer can actually fire you. Federal law protects you if you only have one garnishment, but this protection in effect ceases the moment you have two active. Some states afford you more rights then federal protections do.
If you are presently garnished, but feel you have compelling reasons why you should not be garnished, or that the amount is to high and causing undo hardship you do have one course of action to take. You can protest the wage garnishment, but in order to do so you will need to file papers in the court where you were originally garnished. They will set a hearing date, and at this hearing you can present any evidence showing why you require more of your paycheck to get by. You may even qualify for an exemption. If you do protest your garnishment, I would advise you to hire an attorney, it is well worth the expense to have competent legal expertise at your hearing. The judge may very well reduce the garnishment amount, terminate it all together, modify it, or leave it in place as is.
If you are past due on your student loans, once you are 30 days behind, the U.S. Department of Education, or any student loan lender can automatically garnish your wages up to 15% without the need of a court hearing. Basically once you are in default you can be garnished. by law before they can garnish you they must inform you in writing about how much you owe, how to request records, and how to voluntarily repay the past due debt. This letter will also contain information on how to request a hearing about the pending garnishment. If you do request a hearing you may be able to get the monthly repayment amounts modified.