Wage garnishment occurs as a result of a court order requiring an employer to withhold a certain percentage of an employee's earnings as payment for a debt. Any debt can be subject to wage garnishment, but delinquent child support, educational loans or tax debts are most commonly garnished. Stopping a wage garnishment is possible. Be willing to compromise with bill collectors. Seek legal advice as needed.

Garnishment Guidelines

Title III of the Consumer Protection Act limits the amount an employee may be garnished in a pay period to the lesser of 25 percent of disposable income, or the amount by which disposable income is more than 30 times the federal minimum wage of $7.25 per hour. "Disposable income is the amount of the paycheck that is left after federal and state taxes, unemployment insurance, state retirement and Social Security have been deducted," according to the Department of Labor. Dues that you pay to be a union member, medical and life insurance costs, and contributions to charity are not legally required deductions. They are not counted as part of your disposable income. If your wages are being garnished for a bankruptcy, child support, or federal or state tax debt, up to 50 percent of your disposal income can be garnished if you're supporting a wife and child, who is not part of your support order. If you're not supporting a wife and child, up to 60 percent of your disposable income may be garnished. You can't be terminated if your wages are garnished by one creditor. However, if you're garnished by more than one creditor, you can be terminated by your employer.

File A Claim Exemption

If a wage garnishment is not leaving you with enough money to live on, you can file a claim of exemption with the court that issued the wage garnishment order. Claim exemption forms are available from your local courthouse. On the date of your court hearing, bring documentation of your income and expenses, such as pay stubs, rent receipts and copies of your utility bills. The judge should then stop the wage garnishment.

Negotiate With Creditors

Negotiate with your creditor. Ask if you can make payment arrangements to pay the balance owing. You may be able to pay a larger lump payment, then pay a certain amount each month.

File For Bankruptcy

When you file for bankruptcy, an automatic stay stops collection efforts by your creditors. As long as the automatic stay is in effect, your creditors can't start or continue a lawsuit, and wages cannot be garnished. If you've exhausted all other financial options, bankruptcy is a way to have your debts discharged and start with a clean financial slate. However, a bankruptcy stays on your credit report for up to 10 years, and it will significantly lower your credit score. A poor credit score can make it difficult to get a loan, rent a house or apartment.

Source:

Department of Labor: Basic Provisions and Requirements

More Information:

BCSAlliance.com: Can A Wage Garnishment Be Reversed?

USCourts.gov: Your Day in Bankruptcy Court

BrownandSeelye.com: Stopping the Wage Garnishment: Options