The Basics of Wage Garnishment

If you're asked to pay what you owe to creditors, how will you do it? There's no need to worry; a court order will do it for you.

In cases of child support, back taxes, and others, wage garnishments automatically deduct a part of your salary to pay for these things. Wage garnishments are court orders passed on to the employer via a sheriff or marshal. Therefore, creditors can't just start approaching you for what you owe them.

Not all of your hard-earned cash, however, will be garnished. As long as it's not for child support, bankruptcy, or taxes, the amount cannot exceed 25 percent of your net salary or go below 30 times the federal minimum wage, which is currently at $7.25 per hour. The lower of the two will be considered.

For child support, the garnishment can reach up to 50 percent if supporting another spouse or child, and 60 percent if not. For federal student loans, the garnishment is up to 10 percent.

The reality of losing 10 percent of your pay to debts alone is gut-wrenching. You don't have to worry, however, about losing your job due to debt since the Consumer Credit Protection Act prohibits employers from firing employees in debt. You can choose to struggle with the garnishments or make a stand against adverse collection habits.