Wage garnishment occurs when your employer or bank are legally required to withhold your earnings to settle an outstanding debt.
This debt is often child support, unpaid taxes or student loans, but garnished wages can also be used to pay outstanding medical bills or credit card balances. Creditors use wage garnishment as a last resort when they can’t get in touch with you about debt repayment. The process often involves creditors filing suit and getting a court order, but not always, as is the case when who you owe is the federal government.
Read on to learn more about wage garnishment and how it works.
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Wage garnishment is a legal action creditors use to collect money from a debtor when they believe there’s no other way of getting what they’re owed. Having your wages garnished not only affects your finances, it can also impact your credit score and make improving your credit all the harder.
In the wage garnishment process, a creditor, after failing to receive payment from the debtor, files a suit and a court issues an order mandating the garnishment. However, garnishment can also occur through other legal procedures when you owe the federal government. In either case, employers or banks are then required by the court to garnish the debtor's wages until the debt has been repaid.
After the decision, the court will notify you and your employer or bank about the...
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