Wage garnishment (or wage attachment) is one of the most utilized weapons in a creditor’s collection arsenal. It is a court order that allows a creditor to take money directly from your paycheck until a debt is fully paid. The actual amount that a creditor can garnish depends on several factors, including the type of debt, as well as federal and state garnishment limits. You can use this Maryland Wage Garnishment Calculator to find out how much will be taken from your paycheck because of a wage garnishment. But what you, specifically, want to know is who can garnish wages? Can a debt collector garnish wages? What about unemployment or the IRS? We will explore these questions and more throughout this article.
Who Can Garnish Wages?
In order for most creditors to obtain a wage garnishment in Maryland, they must first file a lawsuit, obtain a judgment, and get a court order. This is true for most types of debt, including credit card or medical bills. The creditor can’t immediately garnish your wages if you fall behind on your payments. Here in Maryland, this is often easy, because the creditor can request what is known as an “affidavit judgment” under Md. Rule 3-306. However, not all creditors have to obtain a judgment before garnishing your wages. Some creditors, like those you owe taxes, federal student loans, child support, or alimony, have a statutory right to take money directly out of your paycheck.
- The Internal Revenue Service (IRS) does not have to file a suit in order to garnish your wages (in this case called a levy) if you owe back taxes. The weekly exempt amount the IRS can garnish is based on the total of the taxpayer’s standard deduction and the aggregate amount of the deductions for personal exemptions allowed the taxpayer in the taxable year in which such levy occurs. This number is then divided by 52, the total number of weeks in a calendar year.
- State and local governments can also garnish your wages to collect unpaid taxes. However, the amount they can take from your paycheck and the processes they must follow in order to do so depend on state law.
- If you are ordered to pay child support or alimony and you fall behind on your payments, your wages can be garnished without a court order. The limits for these are much higher than other types of debt – up to 60% of your disposable earnings. And the garnishment can be increased by an additional 5% if you’re behind on your payments by 12 week ors more.
- The U.S. Department of Education can also garnish your wages without obtaining a court order – called an “administrative garnishment” – if you fall behind on your federal student loan payments. The limit for this type of garnishment is 15% of your disposable earnings OR the amount by which your weekly disposable wages exceed 30 times the federal minimum wage – whichever is less.
In the event that you have more than one garnishment, they are satisfied in the order in which they were served. Each garnishment must be satisfied before the subsequent garnishments can take effect, under Md. Code C.L. § 15-603.
You Can Stop Wage Garnishment!
Did you know that bankruptcy can stop wage garnishment? When you file for Chapter 7 or Chapter 13 bankruptcy, the automatic stay goes into place, which stops all collection activity, including auto repossession, aggressive tax collectors and collection calls/letters, and, of course, wage garnishment, just to name a few. The automatic stay gives you the protection you need to reorganize your debts. If you want to learn more about who can garnish wages or how bankruptcy can stop wage garnishment, contact the experts at Steiner Law Group. We are a boutique law firm in Maryland that assists individuals and businesses with bankruptcy and financial restructuring services. We have helped hundreds of individuals, families, and businesses discharge millions in debt, and have experience stopping wage garnishments and getting back certain garnishments that were taken. Please schedule a risk-free consultation or contact Steiner Law Group, LLC at (410) 670-7060 to learn more about bankruptcy options.