A wage garnishment is when money is deducted directly from your paycheck. It begins after a court order or order from a government agency is sent to your employer, which requires them to withhold a certain amount of money from your paycheck and send that money directly to the creditor. The garnishment will continue until the debt is paid in full or an arrangement is made to pay off the debt sooner.
Before being able to garnish your wages, most creditors must first obtain a court order. This means they must bring a lawsuit against you for unpaid debt (breach of contract), win the suit and get a judgment, and only then can they seek a court order to garnish your wages. Creditors who must first obtain a court order (judgment creditors) include credit card companies, banks, medical providers, and many other types of creditors. Creditors who may garnish wages without a court order are specifically listed by law, and include the IRS and certain other governmental agencies.
Wage garnishments are subject to both federal and state laws.
Federal Wage Garnishment Law
The federal Consumer Credit Protection Act, Title III limits the amount of your earnings from employment that can be garnished. Subject to a few exceptions, the maximum allowable garnishment for any workweek may not exceed the lesser of:
- 25% of the employee’s disposable earnings; or
- The amount by which an employee’s disposable earnings are greater than 30 times the federal minimum wage. 15 U.S.C. § 1673(a).
The law defines “disposable earnings” as “that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld.” 15 U.S.C. § 1672(b). The amount of the garnishment will be determined based on the amount of earnings left after legally required deductions are made. Legally required deductions include federal, state, and local taxes, the employee’s share of Social Security, Medicare and State Unemployment Insurance tax, and withholdings for employee retirement systems required by law.
Certain types of creditors are allowed to take more than the maximum allowable garnishment listed above―more than 25% of disposable earnings. The limitations do not apply to specific types of debts, including federal or state taxes, for certain bankruptcy court orders, child support or alimony, and certain other debts.
Georgia Wage Garnishment Law
Georgia law also places limits on the amount that can be garnished from your wages. In regard to judgment creditors, Georgia follows the federal maximum allowable garnishment listed above. Also, Georgia mandates that a judgment creditor provide proper notice of their intent to pursue garnishment. O.C.G.A. 18-4-64.
In Georgia, your wages can be garnished without a judgment-based court order for unpaid income taxes, court-ordered child support (including child support arrears), and defaulted student loans.
Bankruptcy Immediately Stops Wage Garnishment
Filing for bankruptcy stops wage garnishment immediately. In fact, bankruptcy is a powerful tool that stops all collection action against you, including collection calls and lawsuits for unpaid debt.
To discuss your financial situation and whether or not bankruptcy is the right choice for you contact us or call (912) 351-9000 for a free consultation. For over 35-years we have proudly served the people of Savannah, GA and surrounding areas.
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