Wage garnishment is when the judicial system orders for a certain portion of your wages to go to a creditor you owe. Your employer takes the money out of your paycheck to ensure that you pay the debt. Most creditors must go through a legal process before they can garnish your income. They need to file a lawsuit, win the lawsuit and ask the court for wage garnishment. New Jersey courts usually wait until you fail to put effort into paying off the debt to garnish your income. Limitations on how much can be taken from your paycheck depend on the type of debt you owe.
There are federal and state limitations on wage garnishment. Federal law prevents any state from garnishing more than 25% of your disposable income unless the type of garnishment is spousal support, alimony or child support. In all situations, the judge will take into consideration how much money you need for your living expenses. They aim to never take so much money that you can’t meet your basic needs.
New Jersey limits
New Jersey has placed tighter wage garnishment limits for certain situations. If you are within 250% of the poverty level, then creditors can’t garnish more than 10% of your income. New Jersey also prevents creditors from garnishing military income and benefits. In addition, state law protects employees from termination over their wage garnishment. If you suspect that your employer fired you because of your wage garnishment, you could consult with an attorney.
Federal and state governments can garnish your income for unpaid taxes without a court order. How much the federal government can take depends on your deduction rate and dependents.
Student loans on default are exempt from court orders. The creditor can garnish up to 15% of your disposable income for student debt without a court order. However, they can’t take more than 30 times the minimum wage.
Both federal and New Jersey law have stipulations in place to protect you from creditors taking too large of a portion of your salary. Most types of creditors also need a court order to garnish your wages.