Understanding Garnishment: What It Is and How It Works
What is garnishment?
Garnishment is a legal mechanism used by creditors to recover unpaid debts, often by collecting money directly from a debtor’s wages. This process involves a third party, typically the debtor’s employer, who is legally obligated to withhold a portion of the employee’s earnings and send it to the creditor, based on a court order.
Though the debt belongs to the employee, it’s the employer who carries out the garnishment, deducting the specified amount from each paycheck and remitting it to the appropriate party, which could be a court or the creditor directly, depending on the judgment.
How Garnishment Works
When a creditor wins a lawsuit against an individual, the court may issue an order allowing repayment through wage deductions. The employer, acting as the garnishing agent, is then required to begin withholding part of the employee’s income and continue doing so until the debt is fully repaid.
This wage garnishment continues until the total amount outlined in the judgment is satisfied — or until the court instructs otherwise.
Common Examples of Wage Garnishment
Garnishment orders can result from a variety of legal or financial obligations. Common examples include:
- Child support and alimony, These often take top priority.
- Federal or state tax debts
- Court-ordered settlements
- Defaulted student loans, These may be pursued by the Department of Education or private lenders.
If multiple garnishments apply to a single employee, they must be processed in the legally established order of priority.
What It Means to Garnish an Employee’s Wages
When a wage garnishment is in effect, an employer must withhold a portion of the employee’s earnings, whether it’s salary, hourly wages, bonuses, or commissions and forward it to the designated party. This process is legally binding and must continue until the employer receives formal notice to stop.
Modern payroll systems like Beyond can simplify garnishment management by ensuring accurate calculations, tax compliance, and timely remittance — helping businesses stay aligned with legal requirements.
What Is a Stay of Garnishment?
A stay of garnishment is a court-ordered pause on wage deductions. It’s often granted when an employee files for Chapter 7 or Chapter 13 bankruptcy protection. This stay notifies the employer to immediately halt any wage withholdings related to garnishment.
Once the stay is in place, employers must stop deducting money from the employee’s paycheck until the court either lifts the stay or provides further instruction. This legal protection allows employees time to reorganize their finances and work through the bankruptcy process with legal guidance.