If you owe someone money, your creditor will explore all the possible debt recovery options. If they take the legal route and convince the court, your paycheck may be garnished. Consequently, the court will direct your employer to withhold a portion of your salary towards repaying your debt.
Wage garnishment is a legal process. However, if a creditor has obtained an order to garnish your wage, it is important to understand what federal and New Jersey laws have to say about the process. For instance, a creditor cannot garnish more than 25 percent of your disposable income per the Consumer Credit Protection Act (CCPA).
New Jersey wage garnishment laws
Under New Jersey law, your creditor must obtain a court order before garnishing your wages. Even so, there are limits to when your wage can be garnished. If your income is within 250 percent of the federal poverty level, then your creditor can only garnish up to 10 percent of your disposable income. Also, the creditor cannot garnish any income and benefits that result from your military service.
New Jersey laws also protect you from termination over wage garnishment. Thus, if your employer fires you on such grounds, you may take legal action against them.
New Jersey wage garnishment statute of limitations
There are two key statutes that affect any garnishment. First is the time limit within which the creditor can bring a lawsuit. This statute of limitations varies depending on the debt in question. For instance, if there was a contract, then the statute of limitations is six years. The same applies to debts that were contracted orally.
That said, if the creditor had previously sued and received a favorable judgment, then they have up to 20 years to act. This means the creditor has up to 20 years to garnish your paycheck.
The law permits a creditor to garnish your wage under certain circumstances. Learning more about New Jersey wage garnishment laws can help you safeguard your rights and interests when a creditor is threatening to garnish your wages.