Wage Garnishment Legal Counsel for Northern and Central New Jersey Debtors

By means of a Wage Execution Order, a court can direct a debtor’s employer to withhold a portion of the debtor’s wages or salary and pay it directly to a creditor. This is commonly referred to as wage garnishment. The impetus for it is most often a lawsuit filed by a creditor attempting to collect the debt it’s owed. When the creditor wins a monetary judgment from the court, the Wage Execution Order ensures that money actually is collected from the debtor to pay the judgment amount.

Northern and Central New Jersey residents facing wage garnishment need not fear: The help they need to deal successfully with this matter is readily available to them from Bankruptcy Attorney Douglas Mitchell. Here are few things Douglas would like you know beforehand if wage garnishment looks likely in your case.

Limits on Garnishment

Under federal law, a creditor can garnish the lesser of …

  • a fixed percentage of a debtor’s disposable earnings, or
  • a fixed percentage of a debtor’s disposable earnings minus a multiple of the federal minimum wage, whichever is less.

Under New Jersey law, creditors are more strictly limited in the amount of a debtor’s earnings they can garnish than under federal law. The limits set by New Jersey law depend on whether the debtor earns more or less than a fixed percentage of the federal poverty level for his or her family size.

The amount that can be deducted is generally determined by calculating “disposable earnings.” Disposable earnings, you’ll recall, are an employee’s gross wages less deductions required for things like tax withholdings, payroll taxes, and state employee retirement contributions.

Thus …

  • If the debtor earns less than a set percentage of the federal poverty level, no more than a fixed percent of his or her gross earnings may be garnished by the creditor.
  • If the debtor earns more than a fixed percentage of the federal poverty level, up to a fixed percentage of the debtor’s disposable earnings may be subject to garnishment.

Multiple Judgments Against a Debtor

If more than one creditor is seeking to collect debt with a Wage Execution Order, those creditors must stand in line to receive garnished wages. Judgments are awarded, first, according to the type of debt incurred, then according to when the judgment was obtained. Child support payments, tax debt, and federal student loan obligations get top priority. Next in line, after those obligations are satisfied, are any debts that can be paid to consumer creditors.

Help Is at Hand

If you yourself are facing wage garnishment or have questions about New Jersey wage garnishment laws, get the help that’s sustained so many other Northern and Central New Jersey residents: Contact Mitchell Law Offices.