The New Jersey court garnishes your wages for several reasons. Some of the most common reasons for wage garnishment in New Jersey include payment of back taxes, child support, spousal support, vehicle registration, and court-ordered debt. Court-ordered debt includes judgments related to debt collection lawsuits (personal judgments).
Wage garnishment is a common legal tool creditors use to collect bad debts. However, garnishing wages can create a devastating financial burden on individuals and families. For example, if someone is living in and is on the New Jersey minimum wage of $13.00, garnishment can be debilitating.
Fortunately, you have options for stopping a wage garnishment in New Jersey.
Below are answers to frequently asked questions about wage garnishment in New Jersey. Even though there are numerous reasons your wages could be garnished, we limit the information in this article to wage garnishments for debt collection.
How much can you be garnished? Take the New Jersey wage garnishment calculator below to help you find out.
Our wage garnishment calculator is a free tool available online. After entering your information, the calculator estimates the amount of your wage garnishment. You also receive a detailed analysis of your debt-relief options to stop wage garnishment, including the pros and cons of each option.
You can request additional information free of charge after reviewing the results.
The wage garnishment process in New Jersey depends on the type of debt being collected.
For example, there are specific procedures for withholding child support and spousal support from a person’s earnings. The federal government does not need a court order to withhold up to 15% of your earnings for unpaid student loans. Likewise, the Internal Revenue Service can garnish your wages for back taxes without a court order.
However, the wage garnishment process for general creditors is different. Let’s take a look at that process in more detail.
A creditor cannot automatically garnish your wages for an unpaid debt. First, the creditor must obtain a personal judgment against you for that debt by filing a debt collection lawsuit. Common debt collection lawsuits involve credit card debts, medical bills, personal loans, repossession or foreclosure deficiencies, and other unsecured debts.
The creditor files a complaint with the court and serves you a copy of the complaint. The complaint includes the facts of the case, a summary of the law, a description of the debt, and the amount you owe. The Summons state how long you have to respond to the lawsuit, generally 30 days.
The court sets a trial date if you file an answer or response to the lawsuit. The court schedules a default hearing if you do not respond to the lawsuit before the deadline. The creditor proves it served you with the lawsuit at the default hearing. It also offers evidence proving your debt and showing you did not pay the debt.
If the creditor’s documents are sufficient to prove you owe the debt, the court enters a default judgment. A default judgment is a court order stating that you owe a specific amount of money to the creditor.
The judge’s final order and judgment are filed with the clerk of court. The creditor may then take further legal action to collect the debt, including requesting a wage garnishment order.
The creditor requests a writ of execution from the court. Here is an example writ of execution for New Jersey. The court attaches an earnings withholding order to the writ authorizing an employer to withhold money from your earnings to the judgment.
The garnishment packet is served on your employer. Your employer begins garnishing your wages with the first paycheck you receive after 10 days from the date of service.
In New Jersey, the levying officer (a sheriff or marshal) is the person responsible for collecting the money from the employer and sending it to the creditor. The wage garnishment order or Earnings Withholding Order provides an employer with all information necessary to begin the wage garnishment.
New Jersey places wage garnishments in a specific priority. The priority is:
Personal judgments for medical bills, credit card debts, personal loans, and other unsecured debts fall into the fifth category. The order with the highest priority receives payment first. If the employer receives two orders with the same priority, the order received first receives priority.
Your employer must provide you with a copy of the garnishment order. You may challenge the garnishment in court, but the deadline for filing a challenge is short. You may have just 10 days after you receive the wage garnishment to ask for exemptions.
If you take no action, your employer begins deducting money from your paycheck and continues to deduct funds until the debt is paid in full.
The first defense you have to stop wage garnishment is to fight the debt collection lawsuit. Filing a response to the lawsuit allows you to argue your case before a judge. Consulting a lawyer as soon as you receive the debt collection lawsuit is the best way to understand your rights and your options for defending yourself against the lawsuit.
If the creditor obtains a wage garnishment order, there are several things you could do to stop wage garnishment in New Jersey.
Filing for bankruptcy in New Jersey may be common option to stop a wage garnishment because many people in New Jersey cannot afford a garnishment when living check to check. Including wage garnishment bankruptcies, there were 11,754 bankruptcies filed in the year ending June 30, 2021.
Filing bankruptcy stops wage garnishment. Creditors must stop all debt collection efforts when you file a bankruptcy petition, including garnishing your wages.
A Chapter 7 bankruptcy in New Jersey can be the most affordable option. That said, you often have to qualify for bankruptcy using the New Jersey bankruptcy means test and income limits. For example, below are the income limits for bankruptcy cases filed on or after May 15, 2022 for New Jersey.
|# of People||Annual Income|
Please note that the income limit is an additional $9,900 per household member greater than 9,
If the underlying debt is dischargeable in bankruptcy, the creditor cannot restart the wage garnishment when you complete your Chapter 7 bankruptcy case. Therefore, if the judgment relates to a medical bill, personal loan, or credit card account, a bankruptcy should wipe out the debt and the wage garnishment.
A Chapter 13 bankruptcy in New Jersey may help with a garnishment, but it’s often more expensive and can take 3 or 5 years to complete.
Let’s discuss if your garnishment is not dischargeable in a Chapter 7 bankruptcy.
If your wage garnishment is for a debt not dischargeable in bankruptcy, you might want to discuss filing a Chapter 13 bankruptcy with a bankruptcy lawyer. A Chapter 13 bankruptcy can allow you to repay certain debts over five years that you cannot discharge.
You’re probably wondering how much it costs to file bankruptcy in New Jersey. The cost to file Chapter 7 bankruptcy is $338, and the cost to file Chapter 13 bankruptcy is $313. This is just the filing fee, and you may be able to get that waived if you are under the fee poverty guidelines for New Jersey as seen below.
|# of People||150% Poverty Guideline|
|* Add $4,720 for each individual in excess of 9.|
That said, the Chapter 7 attorney costs in New Jersey may range from $1000 - $2800 and the Chapter 13 attorney costs in New Jersey may be approximately $4,500.
Specific cities may have different attorney fee ranges. For example, the estimated attorney fee is $1,300 in Jersey City and $1,375 in Paterson
Paying the debt in full stops the wage garnishment. However, if you cannot pay the debt in full, you might be able to negotiate with the creditor for a settlement. For example, the creditor may agree to accept a lower amount to pay off the wage garnishment if you pay the amount in one payment within 30 to 60 days.
However, if you negotiate a wage garnishment settlement with the creditor, make sure that you obtain a written agreement outlining the settlement terms before submitting payment to the creditor. It is always wise to have a lawyer review the agreement before you sign it or submit payment.
You can request an exemption from the wage garnishment because you need the money to support yourself and your family. You must file a wage garnishment exemption form to request this relief. You can also try to use an example letter to stop wage garnishment if you have income that is protected from debt wage garnishments such as social security income.
Please note that some states allow for you to request for an exemption and other states may not allow you to apply.
Let’s say you are living in Newark or Jersey City and have seen your rental prices sky rocket, making unable to pay the necessary living expenses for yourself and your family, the court might exempt you from a wage garnishment. However, you will not receive an exemption if you:
To request an exemption, you must file a Claim of Exemption from Wage Garnishment with the levying officer (the marshal or sheriff who issued the Earnings Withholding Order). You will also need to complete and file a Financial Statement with the Claim of Exemption form.
You must explain why the wages the creditor wants to garnish from your pay should be exempt. Therefore, you need to include details about your and your family’s specific needs.
For example, if you have recurring medical bills because of an illness or medical condition, explain the situation and include proof of the recurring medical expenses. The more details you can provide, the better your chance of receiving an exemption.
The form allows you to request a total exemption. In other words, no money would be taken from your paycheck. It also allows you to propose an amount to be withheld each pay period to pay the creditor. Some individuals propose an amount they can afford to pay toward the debt that is less than the amount of the wage withholding order.
The creditor can agree to the Claim of Exemption by not responding to your request. If so, the sheriff tells your employer to stop withholding funds from your paycheck. However, the court schedules a hearing if the creditor opposes the exemption. You can offer evidence and witnesses at the hearing to help prove that you need the funds to support yourself and your family.
The judge has the final decision. If he grants your exemption, you receive your money back that has been withheld, and the wage garnishment stops. If the judge rules for the creditor, the wage garnishment continues.
How much can you be garnished? The garnishment laws vary by state. There are federal laws that govern wage garnishments too. Let’s look at the New Jersey wage garnishment laws.
New Jersey state law limits the amount of earnings that can be withheld from each paycheck. The amount is often based on your disposable earnings and the applicable minimum wage.
The wage garnishment amount in New Jersey is the following:
"Under New Jersey law, a creditor may only garnish: up to 10% of your income if you earn no more than 250% of the federal poverty level for a household of your size, or for a debt owing to the state, up to 25% if you earn more than 250% of the federal poverty level."
Therefore, in general, an employer must calculate your disposable income AND the amount you would make if you were paid the New Jersey minimum wage. For example, the New Jersey minimum wage is $13.00.
However, some cities have established a higher minimum wage. Therefore, employers need to use the minimum wage they would pay an employee based on location and company size.
Earnings include all money paid to you by your employer for services. Your earnings subject to wage garnishment include, but might not be limited to hourly wages, salaries, overtime pay, bonuses, commissions, vacation pay, and sick pay.
After deducting the required withholding amounts, the amount remaining is your disposable earnings for the pay period. Required withholding includes:
Voluntary deductions are not considered allowed withholdings for calculating disposable income. Therefore, you cannot deduct the amount you pay for health insurance, voluntary retirement accounts, or life insurance.
Other wage garnishments have different withholding rules. For example, the above figures do not apply for wage orders regarding child support. As a result, you could pay more in child support than you would have to pay a creditor for a personal judgment.
Federal law allows the U.S. Department of Education to withhold up to 15% of a person’s disposable earnings for unpaid federal student loans. However, an amount equal to 30 times the federal minimum wage is exempt from this withholding.
The Internal Revenue Service may also garnish your wages for unpaid taxes. The garnishment amount is based on your filing status and the number of dependents. The IRS provides a table for exempt income from wage garnishment.
Child support orders include wage withholding provisions. The IRS and the U.S. Department of Education do not need court orders to garnish your wages for student loans and federal taxes.
Some states have enacted executive orders to help with garnishments due to COVID. Unfortunately, many of those exemptions may have expired.
Dealing with debt problems can be overwhelming. However, you do not need to handle it alone. We can help. Take the wage garnishment calculator to estimate your wage garnishment amount and see personalized costs to stop wage garnishment.
At Ascend, we provide free services to individuals who need debt relief. We understand that everyone’s situation is unique. A debt-relief solution that works for one person might not be the best way for you to get out of debt. We work with you to analyze your financial situation and review all debt relief options to find the best one that works for your situation.