Many people find it difficult to make ends meet, sometimes having to borrow money or use credit cards to make up the difference that their regular income leaves. While this short-term solution can serve as a stopgap in emergencies, too often it just drives people into deeper financial difficulties. Failure to pay debts can lead to creditors garnishing your wages. When this happens, people have even less income available to meet their basic living expenses, leading to repossession of furniture and vehicles and other less-than-desirable outcomes.
When a creditor threatens to garnish your wages, it is not as simple as it may sound. There is a process that they must follow that takes time. In some cases, you may be able to stop them from taking your hard-earned income.
Georgia Wage Garnishment Law
The law regarding wage garnishment in Georgia recently changed following a court decision proclaiming that the prior law was unconstitutional. Generally speaking, a creditor is legally allowed to take up to 25% of your disposable earnings or the amount by which your income exceeds 30% of the federal minimum wage, whichever is less. If you are behind on child support payments, up to 65% of your disposable income may be garnished. If your disposable income does not exceed 30 times the federal minimum wage, it cannot be garnished.
What exactly does disposable income mean? Basically, this refers to your net wages, or those left after your required deductions are made for things like social security, state and local taxes, and unemployment insurance.
If you have more than one wage garnishment, the total amount that can be garnished may not exceed 25% of your disposable income.
When Can A Creditor Garnish Your Wages?
There are a couple of different scenarios out there when it comes to wage garnishment procedures. Debts like credit cards and medical bills require a court order before the creditor can garnish your wages. For this to happen, the creditor must follow all procedures required to file a lawsuit after attempting to collect the debt. A judge must agree that the debt is valid and that you owe the creditor money. Once that happens, a judgment is issued. The creditor must then present the judgment and order to your employer so that they can arrange for a percentage of your wages to be distributed to the creditor.
In special circumstances, a judgment is not required. This is true in cases where you have defaulted on:
- Child Support Payments
- Student Loan Payments
- Local, State or Federal Tax Payments
All child support orders include a provision that allows the government to garnish your wages in the event that you are in arrears on support payments.
If you fail to pay your student loan payments in accordance with your payment plan, the government may take up to 15% of your disposable income, but again, they cannot take more than 30 times the federal minimum wage.
If you are behind on your tax payments, the government may garnish your wages based on your income, deduction rate and dependents.
Just because someone is threatening to garnish your wages does not mean they have the legal grounds to do so. If you have been threatened with wage garnishment, or are having difficulty paying your bills, please call us today for a free consultation.