How Wage Garnishment Works and How to Avoid It?

Wage garnishment is one of the last resorts in debt collection when a debtor is unwilling or unable to pay back his creditors as per the terms and agreements previously agreed upon. This hurts the debtors as a part of the wage is deducted by the employers and paid directly to the creditors. It not only hurts the debtor financially but also creates a bad impression in the eyes of the employer who is bound to deduct a portion of the wage by a court order. With the law prevents the employer from firing the employee whose wages are being garnished second or third wage garnishment order depending on the state takes away such protection.

How Does It Work?

Once the debtor defaults on the repayment and the creditor has decided that it cannot collect the outstanding amount it would usually sell the debt to a debt collection agency. If the agency is unsuccessful in recovering the debt it usually takes the legal course in the interest of its client. A lawsuit is then filed against the debtor in an attempt to recover the outstanding dues. The court then passes an order directing the employer to garnish wages from the creditor.

Wage garnishment will take into account all the basic requirements and allow only a portion of the pay to be garnished. This amount to be garnished varies from state to state, for instance in California the law allows less than 25% of the wage to be garnished from the pay. It also protects the deductions that a person is legally required to pay such as federal, state and local taxes, unemployment insurance, state employee retirement system payments and Social Security payments.

How To Avoid Wage Garnishment

• The best way to avoid wage garnishment is to negotiate with the person or the organization to which you owe money. You can explain your financial constraints and work out a payment plan that suits your current financial situation without your wage having to be garnished. Although creditors aren't any legal obligation to accept your request in most cases they do so to avoid hassles associated with wage garnishment.
• If this doesn't work out with your creditor and you are facing financial constrains as a result of wage garnishment you can file for a "Claim of Exemption" in the court to stop wage garnishment. Here you will need to show the court that you are unable to meet your basic living costs due to wage garnishment and get a stay on this.
• Filing for a bankruptcy should be your last resort in avoiding wage garnishment. Here you will need to approach the court and the bankruptcy judge will issue a stay on almost all wage garnishments (child support is usually exempted from this). However filing for a bankruptcy has its demerits to and you should take those into consideration.

Ideally you should approach a wage garnishment attorney who will take your situation into consideration and help you choose a path keeping all your interest in mind.

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