According to a November 2020 report from the National Consumer Law Center, more than 4.5 million Americans had their paychecks garnished for consumer debt. Wage garnishment can cause undue stress and bury you deeper into financial hardship. Fortunately, there are ways to avoid wage garnishment and course-correct on your path to financial freedom. Our wage garnishment team details what wage garnishment is, the types of wage garnishments, and how to stop it.
Understanding wage Garnishment
Wage garnishment is how courts and government agencies collect the overdue debt from employee wages. Under California law, the most that can be withheld through wage garnishment is the lesser of:
- 25% of your disposable income or,
- 50% of the amount by which your weekly disposable earnings exceed 40 times the state hourly minimum wage.
Wage garnishment can make a sizeable dent in money coming in and destabilize your finances. Overdue consumer debts, student loans, and child support are common reasons for wage garnishment. Let’s explore examples of wage garnishment situations and how they may affect you.
The Department of Education or any entity collecting for this agency can order your employer to withhold 15% of your disposable income to repay your defaulted federal student loan. This is called “administrative wage garnishment.”The government isn’t required to sue you in court and doesn’t have to get a judgment to begin administrative wage garnishment.
Under California civil code § 4701, all court orders for child support include an automatic income withholding order, even in the absence of payment delinquency or non-payment. If they fall behind in child support, the parent ordered to pay child support can also get a wage garnishment order from the court. Up to 50% of your disposable earnings may be garnished to pay child support.
California can garnish up to 25% of your disposable earnings if taxes are owed. The IRS doesn’t have a set limit on how much they can garnish. Instead, they use a specific formula involving deductions and dependents to decide how much of your check you keep. If you have unpaid taxes, you should consult a lawyer to learn precisely how much of your wages may be at risk.
Can I stop Wage Garnishment in California?
There are three ways one can stop wage garnishment in California;
- Speaking with the creditor- Try to negotiate an alternative arrangement with the creditor. Sometimes creditors are open to one-time payments or settlements instead of wage garnishments.
- Filing a claim of exception- You may be able to have the wage garnishment stopped or reduced by filing a California Claim of Exemption WG-006. You will have to prove that the money being garnished is needed to support yourself or your family. Those needs must be necessities of life, such as food and housing.
- Filing for bankruptcy- You can stop the wage garnishment from proceeding by filing for bankruptcy in California. This may be considered a last resort, but it may be the best option for many.
What to do If Your Wages Are Garnished
If you received notice from your employer that will garnish your wages, you must seek legal counsel. Usually, wage garnishment starts ten calendar days from the date you received the order. Time is of the essence, and an experienced wage garnishment lawyer will be able to assess the particularities of your case and provide you with the best course of action.
Contact Our Los Angeles Wage Garnishment Team Today
Wage garnishment can be a frightening experience and put you in financial hardship. It is critical to take preventative steps and get the legal advice you will need through the process. Here at Resnik Hayes Moradi LLP we pride ourselves on our experience and drive to provide our clients with the guidance they need to reach financial freedom.
Contact us today through our website or give us a call at (213) 344-0043 for a complimentary consultation to find out how we can help you!