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A wage garnishment is when a creditor takes money from your paycheck. If you owe money because of a court judgement, child support, student loans, or back taxes, you may be subject to wage garnishment. However, there are limits to how much money can be taken from your paycheck. Learn more about wage garnishment and what your rights are below.
If you lose a lawsuit, the person or company that won the suit can garnish your wages. All they have to do is provide a copy of the court order to the local sheriff, who will then send it to your employer. Once your employer receives the court order, they must notify you of the wage garnishment. You wages will then be withheld and sent to your creditor.
However, unless you owe child support, student loans, or back taxes, your creditors cannot garnish your wages without a court order. Federal law also places limits on how much creditors that win a court judgement can take from your paycheck, which is 25% of your disposable earnings or the amount by which your weekly wages exceed 30 times the minimum wage, whichever is lower. Certain states have lower percentage limits—in Illinois, creditors can only take 15%.
If you want to protest a wage garnishment, you must file papers with the court to get a hearing date. At the hearing, you can show evidence to the judge that proves you need more of your paycheck or that you qualify for an exemption.
Child Support and Alimony
Once a court orders you to pay child support or alimony, the court sends a copy of the records to your employer, who will withhold the ordered amount from your wages and send it to the other parent. This amount may also include health insurance coverage for your child.
When it comes to child support, up to 50% of your disposable income earnings may be garnished if you are currently supporting another spouse or child. If you aren’t supporting anyone else, up to 60% of your earnings can be taken.
The U.S. Department of Education or an agency trying to collect on their behalf can garnish up to 15% of your pay if you are in default on a student loan. No lawsuit or court order is required, but you must be notified at least 30 days before the garnishment is set to begin, with information that includes how much you owe, how to get a copy of records relating to the loan, how to enter a voluntary repayment schedule, and how to request a hearing.
Lastly, if you owe the IRS money, they can take a big chunk out of your wages without a court order. The amount you get to keep is decided by your dependents and your standard deduction amount. State and local tax agencies can also take some of your wages, although there are limits to how much they can take.
If you are struggling with wage garnishment and debt, you may want to consult with one of our Northbrook bankruptcy attorneys at Bach Law Offices today.