What is Wage Garnishment?

A wage garnishment is an obligatory payment of a debt where a portion of an employee's paycheck is automatically withheld to pay the debt.

How Does Wage Garnishment Work?

Courts can set wage garnishments on individuals who become delinquent on their debt payments. Often, wage garnishments are given out when a person is delinquent on child support, spousal support, taxes or loans. If the debtor has a history of failing to pay, a wage garnishment can be implemented to automatically subtract money owed from his or her payroll without his or her consent. For example, if an individual becomes delinquent on $100 monthly loan payments, a wage garnishment automatically deducts the $100 from the person's paycheck and sends it to the lender.

Why Does Wage Garnishment Matter?

Wage garnishments are often levied in association with delinquent child support payments and merchant credit balances. Though illegal in some U.S. states, wage garnishments can be a practical means for recovering long-term unpaid debts.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.