When you owe money to creditors, they may attempt to collect the debt by garnishing your wages. Wage garnishment is the process whereby a creditor obtains an order from a court directing your employer to withhold a portion of your wages and send the money to the creditor.
How many creditors can garnish at once?
Wage garnishment can lead to even greater financial challenges. The good news is there are limits. Unfortunately, for most people, these limits aren’t that comforting.
In most cases, a creditor can only garnish 25 percent of your disposable earnings (the amount of income left after mandatory deductions like Social Security and taxes are taken out). However, there are a few exceptions. For example, if you owe back child support or student loans, a creditor can garnish up to 50 percent of your disposable earnings.
Creditors usually try to work out a payment plan with you before resorting to wage garnishment. If you can’t come up with a payment plan, the creditor may file a lawsuit against you. If the creditor wins the lawsuit, the court will issue an order authorizing the wage garnishment.
If you have more than one creditor, each one may try to garnish your wages. However, the total amount that they can garnish is still limited to 25 percent or 50 percent, depending on the type of debt. So, for example, if you have three creditors who each want to garnish 10 percent of your way one of them can do so. The other two creditors would have to wait their turn.
This is good news, but losing a quarter or half of your take-home income is likely to make things difficult. This is true even for people who aren’t considering bankruptcy. If you have questions about wage garnishment, contact a bankruptcy attorney in Tampa.
