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
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.
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
- 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.
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.
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.