Facing financial difficulty can leave many people feeling lost. Even though you may work your hardest in hopes of obtaining enough money to provide for yourself and take care of outstanding debt, you may continue to struggle. You may begin to feel as if your situation could not get any worse only to find out that your creditors have begun wage garnishment.
Wage garnishment can feel invasive and frustrating. You undoubtedly need your hard-earned money to make ends meet, and when those wages get syphoned, you may feel as if you have fallen even deeper into financial despair. You may also wonder who has the ability to garnish your wages due to outstanding balances.
Who can garnish wages?
If a private creditor obtains a court order, that entity can potentially garnish your wages. These creditors could range from credit card companies to federal agencies aside from the IRS. Though you need to remember that the IRS does have the ability to garnish wages, but the agency does not need a court order.
If a credit card company or debt collection agency attempts to threaten you with wage garnishment but does not have a court order, they likely cannot take your wages. However, they could take the necessary steps in order to obtain that order and begin garnishment proceedings.
How much of your wages can be garnished?
Luckily, you cannot lose the entirety of your paycheck to garnishment. Federal and collection agencies have the ability to garnish a maximum of 15 percent of your disposable income to put toward your outstanding balances. When private creditors attempt to garnish your wages, they have the ability to take up with 25 percent. Of course, these figures could vary depending on your specific circumstances and potential for economic hardship.
Is your property at risk?
In some cases, creditors may not stop at wage garnishment in hopes of covering debt liabilities. The possibility exists that they may also attempt to repossess property or force you into liquidation.
Can you stop garnishment and other actions?
Though garnishment or the threat of repossession or foreclosure can seem frightening, you do have options that could potentially help stop such actions. Filing for bankruptcy could place an automatic stay on collections and provide other assistance to help you get your financial affairs back in order. Therefore, you may want to find out more information on what bankruptcy option may work best for your circumstances.