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An introduction to wage garnishment

If you have accumulated a large amount of debt, your creditor may be able to garnish your wages. This can come as a surprise to some, but it is important to understand the process so you can take steps toward managing the situation.

Wage Garnishment

Wage garnishment is a process where a creditor gets an order from a government agency that forces your employer to send a portion of the money you have earned to your creditors. All of this is done in an attempt to pay back the money you owe. In most cases, creditors need to go to court and have the court legally recognize that you owe them money before they can take action. Once they have gone through the process of getting a court judgment, they can begin garnishing your wages. However, there are a few situations in which a creditor can garnish your wages without first getting a court judgment.

If you owe money for unpaid income taxes, child support, or defaulted student loans, creditors can garnish wages without any involvement from a court.

Income Taxes

The Internal Revenue Service (IRS) can take a significant amount from your income and the amount they take depends on your standard deduction amount and the amount of dependents you have.

Child Support

For child support, the amount that is garnished depends on a few factors. If you are supporting a spouse and child who are not the people to whom you are paying child support, the state can take up to 50% of your wages. If you are not supporting anyone else, they can take up to 60%. They may even be able to take up to 5% more depending on the circumstances.

Student Loans

A collection agency can take up to 15% of your income if they are garnishing your wages because of student loans. However, they must notify you before they do so. They are required to inform you of the amount you owe, how to request a hearing regarding the garnishment, how to get copies of your loan information, and instructions for starting a payment schedule.

That being said, there are wage garnishment limits in the state of Wisconsin that prevent creditors from taking more than a certain amount from your income.

Wage Garnishment Limits

The wage garnishment limits in the state of Wisconsin are stricter than the federal limits. In Wisconsin, collectors can only take 20% of your disposable income or whatever is left over after subtracting 30 times the federal minimum wage (30 x $7.25 = $217.50). Whichever of these amounts is smallest is the amount they can take.

You do have rights when it comes to wage garnishment. For instance, your employer cannot fire you because your wages are being garnished to pay a debt. The laws regarding your rights in these circumstances vary from state to state. Confronting issues regarding wage garnishment can feel confusing and overwhelming. If you find that you are in the situation where you want help and support throughout the process, you may want to consider contacting a legal professional who is familiar with the details of wage garnishment.

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