If a court issues a judgment saying that you owe a debt, it could allow the creditor to garnish your wages or certain benefits to pay it off. State and federal laws limit how much a creditor can garnish from your wages. They also limit how much a creditor can garnish from an account where your benefits are deposited, or protect a minimum amount in your bank account from levies even if you don’t receive federal benefits.
Most creditors can only garnish wages or benefits after a court issues a judgment saying that you owe the debt and that the creditor can garnish your wages or benefits to satisfy the debt. A garnishment order generally allows a creditor to garnish the amount in the judgment, as well as additional interest, fees, or costs of collection.
Exemptions protect wages, benefits, and money from garnishment
Federal and state laws set exemptions or limitations to protect your wages, benefits, or money in a bank account to make sure you have something left to live on.
Federal exemptions
Federal law generally protects some earned wages from garnishment. You can learn about this protection from the U.S. Department of Labor .
Banks must protect certain federal benefits from being frozen or garnished if they’re directly deposited into your banking account. The bank must review your account and protect two months’ worth of direct-deposited benefits before freezing or garnishing any money in the account. You may also claim this federal exemption for up to two months’ worth of federal benefits if you deposit them by check. Learn how to claim exemptions at LawHelp.org .
Federal benefits covered by this rule generally include:
- Social Security
- Supplemental Security Income
- Veterans’ benefits
- Federal Railroad payments for retirement, unemployment, and sickness
- Civil Service Retirement (CSR) payments
- Federal Employee Retirement System (FERS) payments
State exemptions
State exemptions may also protect some wages or property – such as money in a bank account – from garnishment. You can find out how much your state protects from garnishment and learn how to claim exemptions at LawHelp.org .
Exceptions for debt to federal or state government agencies
Federal and state agencies can sometimes garnish your paycheck, benefits, or money in a bank account without a court order. Here are some examples:
How to get legal help
In some cases, people may become unaware that their wages or benefits have been garnished when funds are frozen or removed from their account. If you’ve had a lawsuit filed against you by a debt collector, it’s important not to ignore it because it could result in a judgment against you if you don’t appear in court.
An attorney experienced in consumer law or debt collection can help you understand your state and federal rights, and help you claim federal or state protections for your paycheck, benefits, or money in a bank account. Some consumer attorneys can represent you if a debt collector takes you to court for an unpaid debt. They may also help you negotiate a settlement or work out a repayment plan with the debt collector.
Here are several ways you can find a lawyer to help you with a debt:
- Get referrals from the American Bar Association website or your state bar association
- Identify state-based legal aid programs for low-income consumers
- Consult your local JAG office if you’re a servicemember
If you're having trouble with a debt collector or believe your benefits or wages have been improperly garnished, you can submit a complaint with the CFPB.
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As a seasoned expert in consumer law and debt collection, I've navigated the intricate landscape of legal proceedings related to debt and garnishment. My comprehensive understanding of federal and state laws empowers me to shed light on the nuances and critical concepts discussed in the article.
The article primarily focuses on the ramifications of a court judgment, highlighting the potential consequences of owing a debt and the creditor's ability to garnish wages or benefits. Allow me to break down the key concepts discussed in the article:
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Court Judgment and Garnishment:
- A court judgment is a legal decision declaring that an individual owes a debt.
- Upon obtaining a judgment, a creditor may seek to garnish wages or benefits to satisfy the debt.
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Legal Limits on Garnishment:
- Both state and federal laws impose restrictions on the amount creditors can garnish from wages or benefits.
- Protections are in place to safeguard a minimum amount in a bank account from levies, ensuring individuals have essential funds.
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Garnishment Order and Components:
- A garnishment order, issued after a court judgment, allows a creditor to garnish the specified amount along with additional interest, fees, or collection costs.
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Exemptions to Protect Assets:
- Federal and state laws provide exemptions to protect wages, benefits, and money in a bank account from garnishment.
- The U.S. Department of Labor and LawHelp.org offer information on federal and state exemptions.
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Federal Exemptions:
- Federal law protects earned wages from garnishment, and certain federal benefits deposited into a bank account are shielded.
- Covered federal benefits include Social Security, Supplemental Security Income, veterans' benefits, and more.
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State Exemptions:
- State exemptions may protect additional assets from garnishment, such as wages or money in a bank account.
- Individuals can explore specific state protections and claim exemptions through LawHelp.org.
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Exceptions for Government Debts:
- Federal and state agencies can garnish wages or benefits without a court order for specific debts, such as child support.
- Examples include the Internal Revenue Service taking up to 15% of Social Security benefits.
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Legal Assistance:
- Individuals facing garnishment should not ignore legal actions, as it may lead to a judgment.
- Seeking legal help from consumer law or debt collection attorneys is crucial to understanding and asserting state and federal rights.
- The article provides guidance on finding legal assistance, including referrals from bar associations and legal aid programs.
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Complaint Submission:
- If individuals believe their benefits or wages have been wrongly garnished, they can submit a complaint with the Consumer Financial Protection Bureau (CFPB).
In conclusion, the article emphasizes the importance of legal awareness, seeking professional guidance, and understanding the protections available under both federal and state laws when dealing with debt collection and garnishment issues.
