Wage Garnishment: The Three Party Triangle
Wage garnishment is actually a legal process, by which an employer can withhold a percentage of the employee’s salary according to a court order. This is viewed as the final alternative for a creditor to recuperate funds from a debtor. Therefore, this process involve three parties namely the debtor (the employee); the creditor (person who lends the money) and the garnishee (employer). This action is allowed in just about all the states in America, but the maximum amount which can be garnished from an employee’s salary will be determined by the law.
Throughout the United States, federal law helps to protect a debtor by setting up this garnishment amount to around 25 % of this persons disposable earnings; the total salary less income tax. A garnishment order can be given for any kind of financial obligations. But, the popular debt problems which might bring about this action include taxes, alimony, child support, credit cards and non-payment of student loans.
Ways to deal with this procedure
In the event that a debtor fails to repay owed funds on time, he or she can expect to get wage garnishment. When this occurs, a creditor may first inform the debtor by delivering a package which incorporates the court order, letter and spreadsheet and also a certification form intended for the employer.
This employer must complete the certification form and then return this to the creditor who will take further action. This employer is likewise accountable for working out the appropriate amount for garnishment. In cases where this action should be carried out for several creditors, the employer will decide in accordance to a priority basis.
This procedure can affect debtors in several ways, as he or she will encounter problems when applying for loans, credit cards as well as to open bank accounts. A debtor might also have problems with emotional stress, since the employer will become aware of their financial situation. But, one important factor of this procedure is that an employer is unable to terminate a worker on the grounds that this person’s salary is subjected to garnishment in order recover debt.
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