Garnishment is a legal process by which a creditor collects a debt by obtaining a court order requiring a third party, such as an employer or bank, to withhold money from the debtor’s income or accounts. This withheld money is sent directly to the creditor to satisfy the debt.
There are different types of garnishments, and they can be applied to various sources of income, including wages, bank accounts, and even tax refunds. There are legal limits to how much of a person’s income can be garnished, and these limits are often based on federal or state laws.
COMMON TYPES OF GARNISHMENTS
1. Wage Garnishment
– Creditor Garnishment: A court order to deduct a portion of an employee’s wages to satisfy a debt owed to a creditor.- Child Support Garnishment: Often mandated by law, it ensures that a noncustodial parent pays court-ordered child support by deducting the amount from their wages.
2. Bank Account Garnishment
– Creditor Bank Garnishment: A court order to seize funds from a debtor’s bank account to satisfy a debt.
– Tax Levy: The government may garnish bank accounts to collect unpaid taxes.
3. Federal and State Tax Refund Garnishment
– IRS Levy: The Internal Revenue Service (IRS) can garnish federal tax refunds to satisfy unpaid taxes.
– State Tax Levy: Like IRS levies, state tax agencies may garnish state tax refunds.
4. Student Loan Garnishment
– Federal Student Loan Garnishment: The U.S. government can garnish wages and tax refunds to collect on defaulted federal student loans.
– Private Student Loan Garnishment: Private lenders may seek a court order to garnish wages or bank accounts for unpaid private student loans.
5. Spousal Support or Alimony Garnishment
– A court order to deduct a specified amount from a person’s income to fulfill spousal support or alimony obligations.
6. Consumer Debt Garnishment
– Credit Card Debt Garnishment: A creditor may seek a court order to garnish wages or bank accounts to collect on unpaid credit card debt.
7. Judgment Garnishment
– A court-ordered garnishment resulting from a judgment in a lawsuit, which could be related to various types of debts.
Garnishment typically occurs after a creditor has obtained a judgment against a debtor in court. Before garnishing wages or accounts, the creditor must follow legal procedures, including giving the debtor notice and an opportunity to respond. It is advisable for individuals facing the possibility of garnishment to seek legal advice and explore options for resolving the debt before it reaches this stage.
