When you are servicing a loan and have not made payments for a while, your creditor could sue you and get a wage garnishment order approved. A wage garnishment is a legal procedure where a person's earnings can be withheld for the payment of such debt as child support or judgment. So, when you receive a wage garnishment notice at work, it may be a little confusing at first. Read on to understand wage garnishment and how you can stop it. You can also use our wage garnishment calculator to estimate how much will be garnished from your wage.
How Much Can Be Garnished from my Wage?
Use this wage garnishment calculator to estimate how much can be garnished from your wage. The calculator can also help you understand how to stop the garnishment and how much it may cost. Our calculator is easy to use and doesn't need you to sign up. The output is not a guarantee but a mere estimation that could be more or less from the actual amount.
Before discussing how wage garnishment is computed, it is important to understand that not all states allow wage garnishment. Each state has different laws on wage garnishment.
For example, these are the wage garnishment laws that apply and that we factor in our wage garnishment calculator for accurate estimates.Find out the employee's disposable income and the applicable minimum wage. Based on the information, decide how much you can withhold from each paycheck. The maximum withholdable amount may be lesser than, but it may be dependent on the state.
Wage garnishment laws often change, so always check for the applicable rules at the time.
There are numerous factors that the wage garnishment calculator takes into account. For example, if you live in Washington and the Spokane minimum wage is higher than the minimum wage in Seattle Washington, the output could be different.
Most employers use the wage garnishment calculator designed for employers to estimate the right garnishment amount for their employees. This calculator is different and more complicated to use compared to the regular wage garnishment calculator.
Here is how you may get a wage garnishment order against you. First, you will have an outstanding loan you are not servicing as agreed with the creditor. On noticing your default, the creditor will go to court, present their case against you and request a writ of execution. Then, the court will attach an earnings withholding to the writ of execution. The document will be an authorization to your employer to garnish your earnings.
If you have different earning withholding orders against you, e.g., from different creditors and child support, there is a priority to follow for the garnishment calculation. For example, in states such as California, the first priority will be the assignment order for support, followed by earnings withholding for:
When presented with a wage garnishment order from the court, it is easy to assume that it is a final decision. However, you have several options to stop wage garnishment. Our wage garnishment calculator will present these options and compare them for you. These options include:
Once you receive the order, you can submit an objection against it. Go through the contents of the garnishment documents, and see the acceptable way to object to the garnishment. Look for the filing deadline and if the documents don't have objection guidelines, seek help from a legal expert.
In other states, you can file an exemption to the garnishment. While you can also file an exemption, it is harder to receive it.
If you declare bankruptcy, the wage garnishment against you can be lifted, especially if it is related to the outstanding debt. For example, if you are unemployed, living below the median income, or paycheck to paycheck, consider filing for bankruptcy.
There are two Chapters of bankruptcy you can file—Chapters 7 and 13. Chapter 7 bankruptcy is common in the United States and is the most affordable option. However, there is a risk of losing some assets which don't fall under the bankruptcy exemptions. There is also an eligibility criterion you must meet.
You can only file for Chapter 7 bankruptcy if you are living below the median income. So, you will need to take a bankruptcy means test to see if you qualify. Here is a tabular representation of the annual income you should have, depending on your household size.
Before rushing to file chapter 13 bankruptcy, consider debt settlement, and compare the costs of each. Sometimes, debt settlement can be cheaper and will take less time to execute compared to chapter 13.
If you have received a wage garnishment order and the amount deducted from your pay seems too much, you are probably looking for a cheaper option out of debt. There are filing fees and attorney fees associated with filing for bankruptcy. Fortunately, most bankruptcy attorneys allow payment plans for their fees, while some add the fees into the Chapter 13 bankruptcy repayment plan.
The cost to file bankruptcy is $313 to file for Chapter 13 bankruptcy, which is cheaper than the average $338 you pay to file for Chapter 7. However, the attorney fees for a Chapter 13 bankruptcy could be thrice as much as you pay a Chapter 7 bankruptcy lawyer.
Worried about paying for bankruptcy? You can get your filing fees waived if your income is less than the set poverty thresholds, as shown below:
Debt settlement may also be an option if you face a garnishment.
Find out the creditor who sued you and got the wage garnishment executed and try to negotiate the wage garnishment. While the creditor has the upper hand in this situation, negotiation often works, and you could get a discount. However, it may not be negotiable if the garnishment is for child or spousal support.
After getting a wage garnishment order, what do you do next, and what happens after your wage garnishment is paid off? First, determine if the amount being garnished is affordable and for how long the garnishment will be in place. If the amount taken is too high, consider an alternative, like filing for bankruptcy. If you have the funds to pay off the garnishment, you can also consider paying off the wage garnishment early.
On the other hand, if you are comfortable with the amount being garnished, you can attempt to negotiate with your creditor or allow the garnishment to run. Always use the wage garnishment calculator to make an informed decision.
