Court ordered payroll creditor garnishments can be devastating if you are already living paycheck to paycheck. Once they are set in place, your employer can not stop garnishing your wages until the garnishment period has ended, the debt owed has been satisfied, or until a court ordered release has been received. If you have received a notice that a creditor garnishment has been set up to garnish your payroll check, understanding what this means is important.
Understanding what your payroll department does with your garnishment.
When a creditor garnishment is received by an employer or their payroll company, the garnishment is set up to begin according to the laws and requirements. Do not ask your employer to help to avoid, misrepresent, or lie about your income. Do not ask your employer to deduct any amount other then what is required. False reporting will not only cause the employer to become liable for some or all of the debt owed, but can also leave them open for penalties and fines.
The first paperwork received is called the Writ of Garnishment or Notice of Order to Withhold. These are the court documents requiring the debt be paid, and include generally 3 Order Notices. All three must be filled out by the employer, or by the representative responsible for the garnishment in regards to the payroll. The original is to be mailed back to the courts for records, the second to the creditor company, the third to the individual being garnished. These documents are an acceptance by the employer that the garnishment requirements will be fulfilled as the documents instruct.
Over the garnishment period accurate records must be kept. At the end of the garnishment period a Writ known as a Second Answer must be filled out. This will be the employers way of stating that the correct amounts were deducted from the individuals payroll check. Again, 3 copies of this answer are mailed.
When the courts receive the Second Answer, an Order to Pay will be sent to the employer if funds were not already sent with each payroll and were instead withheld to be paid at this time. If there is still debt owed and the courts have granted this to be a continuing Writ of Garnishment, a new Notice of Order to will be sent and process will start over again.
How Much Can Be Garnished?
The Formula used to calculate a creditor garnishment is 25% of disposable income or the amounts that exceed the exempt amount (30 times the Federal Min. Wage for that weeks pay or pay period currently $5.85 per hour), whichever is less. Disposable income is calculated by taking the gross income and subtracting required deductions (taxes). Only the first 25% of disposable income is garnishable for a creditor garnishment. Because some garnishments such as Child Support have a higher priority, and Child Support can garnish up to 50% to 65% of ones disposable wages it is possible that there is not enough left for the creditor garnishment. If a Tax Levy, or a previous garnishment is in effect, this can also leave no amount due for the creditor garnishment in question for that pay period.
I have other deductions from my paycheck. Will this make the amount to garnish lower?
No. other deductions will reduce your net pay, or the amount you actually receive, but they will not lower your disposable pay. Only disposable is used to calculate the garnishment deduction.
I don’t agree with the garnishment. Can I tell my employer to wait until I straighten things out with the creditor?
No. Only the courts can order or release a garnishment. If you feel that the garnishment is not right, or if you want to make other arrangements to pay back the debt you will need to contact the creditor.
Can my employer fire me for having a garnishment?
No. This is against the law. Title III of The Consumer Credit Protection Act protects you from being fired on the basis of having a wage garnishment.
Can my Employer withhold more then what is stated in the Writ.
No. Title III of the The Consumer Credit Protection Act also protects you from being over garnished.
Author is a Payroll Processor and Administrative Assistant for a Payroll Company in Renton, WA specializing in the handling of all aspects regarding payroll for small and medium sized businesses. Responsibilities include acting as representative on behalf of all clients in matters regarding Wage garnishments, Tax Levy’s, and Child Support Orders.
