Getting behind on a debt is one thing. Finding out money may be taken directly from your paycheck is another.
This is called wage garnishment, where part of your pay is withheld and sent toward a debt you owe.
How Does Wage Garnishment Happen?
For many types of debt, a creditor must first take legal action against you and get a court judgment, which is a court decision saying you legally owe the debt.
There are exceptions. Certain debts, such as some taxes, child support, and federal student loans, can follow different rules.
How Much Can Be Taken?
There are limits on how much of your paycheck can be garnished. The amount can depend on the type of debt, how much you earn, and the laws that apply where you live.
A creditor generally cannot just take whatever amount they want.
What If You Don’t Recognize the Debt?
Don’t assume you have to pay just because you received a notice.
Pay attention to any letters or court papers you receive. There may be deadlines to respond or challenge what is happening. (To clear up any confusion, you can have a lawyer review these documents for free through your Legal Plan)
What About Money in Your Bank Account?
Wage garnishment and a bank levy (bank account garnishment) are not the same thing.
Wage garnishment takes money from your pay before you receive it. A bank levy may allow money to be taken from your bank account. Different rules and protections can apply to each.
What Should You Do?
If you’re dealing with wage garnishment, a judgment, or a bank levy, start by gathering any paperwork you received about the debt.
Look for:
- Who says you owe the money
- How much they say you owe
- Whether there is a court judgment
- Any deadlines listed in the paperwork
- Information about how to respond or challenge it
If you don’t understand something, don’t guess. Ask for help.
Your IAM Legal Plan Can Help
IAM members have access to free legal advice through their Legal Plan. A lawyer can review your situation, explain what the paperwork means, and help you understand your options.
Additionally, If debt has become more than you can manage, your plan also provides access to discounted Chapter 7 bankruptcy assistance.
Bankruptcy isn’t the right answer for everyone. But if you’re struggling with serious debt, talking with a lawyer can help you understand whether it makes sense for your situation.
