Sure, you have some debt. You knew about it. You were planning to pay it off. Then next thing you know – money is being deducted out of your paycheck every single pay period. The money you worked hard to earn is being taken from you before you even see it. Creditors are garnishing your wages.
What is Wage Garnishment?
The above situation isn’t uncommon. We see it often as Kansas City wage garnishment attorneys. Wage garnishment happens all the time. So what is wage garnishment? By definition, it is:
“Wage garnishment, the most common type of garnishment, is the process of deducting money from an employee’s monetary compensation (including salary), sometimes as a result of a court order. Wage garnishments continue until the entire debt is paid or arrangements are made to pay off the debt.”
This means a creditor can legally require your employer to send a portion of your paycheck to pay your debts every pay period – without your consent. And it’s not a fun situation to be in.
How Much of Your Wages Can Be Garnished?
The amount of money a creditor can garnish from your wages varies. Every situation is different. However, there are some basic guidelines that most states follow.
Federal guidelines state that a judgment creditor can take up to 25% of your disposable income or an amount that your income exceeds 30 times the federal minimum wage. They can only take the amount that is less.
For example, let’s say you make $1,000 a week after all deductions. 25% of your income is $250. The amount your income exceeds 30 times the federal minimum wage is $782.50 ($1,000 – $217.50). Thus, the creditors could only take $250 per week from your pay as a result of garnishment.
While the federal guidelines apply in Kansas and Missouri, there are certain situations where other laws apply. These include:
- Student Loan Debt: Only 15% of your disposable income can be collected on defaulted student loans. However, the agencies involved do not have to sue you or get a judgment to garnish your wages for student loans.
- Child Support: All child support is automatically withheld unless you agree to pay child support on your own with the other parent. Up to 50% of your earnings can be garnished to pay for child support. Even more can be taken if you’re not supporting another child or spouse. 5% additional can be garnished if you’re more than 12 weeks behind.
- Tax Debts: The IRS doesn’t have to follow federal guidelines regarding wage garnishment. They have their own limits based on your standard deduction and number of dependents.
If your wages are being garnished, you have a number of options available to you. As a Kansas City wage garnishment attorney, we’ve helped people through this difficult time in a variety of ways.
First, you can accept the garnishment. While this is a simple solution, most of us cannot afford to live off 25% less income. That’s a significant amount and could lead to a lot of struggle
Other options include filing for bankruptcy or working with a Kansas City wage garnishment attorney to find a repayment plan with your creditors. Most individuals find the final option ideal after careful consideration.