Know Your Rights: GarnishmentPosted on: March 7, 2023
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A court can take money from your paycheck if you are working or order money to come out of your bank account or other money you have. This is called garnishment.
How does garnishment happen?
Garnishment can happen if someone sues you for money and you lose in court. If you are sued for a debt, take steps to protect yourself!
You will almost always lose if you do not reply to the case in court. If you lose the case in court, there will be a judgment against you. The winner can file papers to ask the court to “garnish” your money. They will look at your money situation and decide how much money to make you pay.
The Garnishment Judgment will order your job or bank to take money from your paycheck or bank account. The money collected this way will be more than you owe.
How much money will come out of my check to pay the debt?
Louisiana law says how much of your money goes to pay the debt.
The amount depends on how much is left over in your pay after what your employer must take out for federal and state taxes, Medicare, Social Security, health insurance, and retirement.
Sometimes your employer takes money from your check for things not required by law, like optional insurance. That money is not safe from a court order taking it to pay a debt.
Here is an example:
You earn $450 a week. If your employer takes out $120 for taxes and another $20 for optional dental insurance. ($450 - $120 = $310)
That leaves you with $310 each week. The law does not require dental insurance, so the $20 a week is not protected from garnishment. Only $330 is protected.
Then the court will look at the amount of money leftover in your pay in two ways and use the one that takes less from your paycheck.
- The court will see how much over $217.50 you have. For this step, the court always protects $217.50 and the taxes, Medicare, health insurance, and retirement your employer must take out. In our example $330 – 217.50 = $112.50. This is the amount the court will consider taking.
- The court will also see how much is a quarter (25%) of the money you have left after the things like taxes your employer has to take out. In our example, a fourth of the $330 is $82.50 ($330 ÷ 4 = 82.50). $82.50 is the amount the court will consider taking.
The court must pick the smaller number after looking at the two examples above. In our example, it garnishes $82.50.
The court uses a different number for unpaid child support! The court picks half instead of a quarter of the money left after things like taxes.
Here is a link to a tool to help you figure out your garnishment amount: https://goodcalculators.com/wage-garnishment-calculator/
Most creditors cannot garnish any federal benefits, like Social Security. Only the federal government can take money out of a federal check to pay back a debt.
For more info: https://www.consumerfinance.gov/ask-cfpb/can-a-debt-collector-garnish-my-federal-benefits-en-1441/
What about unpaid student loans or taxes and things like that?
Garnishment is different for student loans, taxes, and other things.
If you have unpaid federal student loans, the U.S. Department of Education or anyone collecting for it can only take up to 15% of your earnings after money is taken out for taxes and other things required by law. 20 U.S.C. § 1095a(a)(1).
The government does not have to sue you before taking out money to pay back debt.
If you have unpaid taxes, the Internal Revenue Service (IRS) can take money out of your paycheck without suing in court first. They do this by something called a “levy."
This amount of garnishment is based on your tax filings.
See here for more info: https://www.irs.gov/businesses/small-businesses-self-employed/information-about-wage-levies
There are ways that state and local government agencies can collect what you owe. Contact the agency that you owe to find out more.
Why does the garnishment order say I owe so much more than my original debt?
The amount of the Garnishment Judgment will include the amount you owed, plus court costs, interest, and usually attorney fees from when the court made its Judgment against you.
You will also be charged:
- For court costs for the separate garnishment lawsuit,
- For your employer to take out the money for the garnishment.
- For the court to collect the money.
These extra costs can be double or triple the amount of money you owed at the beginning.
How do I stop the garnishment?
The garnishment will continue until all the money owed has been paid. This can take years.
Garnishment will temporarily stop if you are no longer working for an employer. Once the person or company you owe (the creditor) finds out you are working again, they can start the garnishment again.
A bankruptcy filing will stop all garnishments right away. Bankruptcy may be able to get rid of the whole debt. Learn about bankruptcies here: https://www.uscourts.gov/services-forms/bankruptcy
Other resources can be found here:
For information on Louisiana State garnishments: https://revenue.louisiana.gov/Faq/Details/1293