Garnished wages are monies taken from payroll or royalty checks, or from investment checks to pay a debt. People may have their wages garnished as a result of failure to pay back taxes, failure to pay child support, failure to pay creditors, or failure to pay monies in any type of court settlement. Generally a court must order those paying the person who is in debt to reduce the wages. The employer must then send the garnished amount to the appropriate source.
Those who have debts can frequently avoid garnished wages by paying debts, or working out debt payment programs, which are then rigidly followed. When those in debt do not adhere to a payment program, those owed may then ask a court to compel a debtor to pay. In some cases, as in back taxes, it isn’t even necessary to involve the courts to order a garnishment. The government can also fairly easily cause garnishment, as well as reduction of income tax returns when a borrower defaults on a student loan.
One particularly effective result of garnished wages is the collection of back child support. In acrimonious divorces, a spouse may refuse to pay appropriate child or spousal support. This is a significant problem in the US, with many divorced mothers going unpaid for support of their children, and requiring government assistance. When a parent seeks welfare relief from the government, the offending spouse may have his or her wages garnished to pay back the government. In refusal-to-pay situations, the court may order that the offending spouse have garnished wages as a result of refusal to comply with the financial terms of the divorce.
There are a few states in the US that restrict garnished wages to a few types of debts. North and South Carolina, Texas and Pennsylvania allow them only for federal or state tax debts, child support, defaulted student loans that are federally guaranteed, or for compensatory damages decided by a court during a criminal or civil law suit. A credit card company cannot garnish the wages of an employee unless they sue the borrower.
Many states also restrict the amount of wages that can be garnished. In general only 25% of a person’s pay may be taken. In some states, this amount is lower. It is absolutely illegal to avoid garnished wages by hiding assets or by being paid “under the table,” where no record of wage payment exists. Those who do not pay their debts by hiding the money they earn are subject to criminal prosecution for fraud.
