What Does “Garnishment” Mean?
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General Definition: A wage garnishment is a legal tool for a creditor to receive a percentage of your paycheck to pay off a debt.
When a collection agency first takes over an account they will likely reach out to the consumer for payment. However, depending on the situation, they may eventually decide to file a lawsuit. When this happens the court will decide whether to award a judgment to the collection agency for a debt you owe.
When a debt collector receives a judgment they still have not received payment for the debt. In some cases, a consumer will then voluntarily pay the collection agency. However, there are legal tools that a collection agency can use to collect on a judgment. One of those tools is wage garnishment.
This is a legal means for a debt collector to collect on a debt. However, there are still state laws that regulate this process. In addition, sometimes a collection agency may illegally attempt a wage garnishment. If that is the case, you have protections under the Fair Debt Collection Practices Act (FDCPA).
Read on to learn more about the wage garnishment process and your rights.
What is a Wage Garnishment?
A wage garnishment directs an employer to take a percentage of your paycheck each pay period to pay a debt. For a collection agency to receive a wage garnishment, they need an order from the court.
How Does a Collection Agency Get a Wage Garnishment?
A collection agency must have a legal basis for requesting a wage garnishment. It is illegal for a debt collector to request an employer withhold portions of a paycheck without court approval.
A wage garnishment can occur when the request is approved by the court. The typical process starts with a lawsuit. A collection agency will file a complaint alleging an unpaid debt and provide the court with documents to prove that debt. If the court finds in the debt collector’s favor, they will issue them a judgment.
The judgment will state a specific amount the court determined a consumer must pay the collection agency. Once a collection agency receives a judgment, they can request with the court to obtain a wage garnishment.
However, it’s important to understand your state’s laws regarding this legal process. State law will dictate the specific steps a collection agency must follow to obtain a wage garnishment. It will also provide additional parameters such as how much a collection agency can take from each paycheck.
Tip: If a collection agency has a legal wage garnishment, you still want to be engaged in the process. Keep track of how much of the debt they garnished. This will assist you if a collection agency continues taking funds beyond the amount provided in the judgment.
The FDCPA and Illegal Wage Garnishment Actions
Broadly speaking, the FDCPA protects consumers against deceptive collection practices from a collection agency. Included in this protection is unlawful wage garnishments. Garnishing wages is unlawful if it is not authorized by a court. It is also unlawful if they continue to withhold a portion of your paycheck beyond what you owe.
Note: There are state laws on wage garnishments that protect consumers from all creditors. However, the specific rights afforded under the FDCPA only apply to third-party debt collectors.
What Can I Do if the Wage Garnishment is Violating the Law?
If you are dealing with an illegal wage garnishment, take action immediately. This is a serious violation and can have devastating consequences. Given the seriousness of the situation, you may want to get an attorney involved immediately.
If you decide to handle things on your own, you may need to file a lawsuit. If it is related to a court-ordered wage garnishment, notify the court about the violation.
You can also write to the debt collector. They may have made a mistake that they can quickly correct. Of course, if the violation is intentional you can report them to the Consumer Financial Protection Bureau (CFPB). You may also report FDCPA violations to the Federal Trade Commission (FTC).
Conclusion
If you owe a debt to a collection agency it is important to be proactive. You may be able to avoid a lawsuit if you work with the collection agency. However, if a collection agency sues you and receives a judgment, it’s important to understand how wage garnishment works and your rights.
If you believe a collection agency is illegally accessing your paycheck, do not allow it to continue without taking further action. Contact a consumer rights attorney to discuss your situation today.
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