When a creditor has difficulty collecting money from you he may attempt to garnish your wages or bank account. But there are certain garnishment exemptions which restrict how much he can take out.
Income Limit Garnishment Exemptions
There is a federal law that limits how much money may be taken from your paycheck or banking account. Under a normal garnishment, no more than 25% of your wages may be garnished. However, the cutoff may be less than 25% if your income fails to meet a minimum level. If the garnishment is a child support garnishment, up to 50% of your wages can be taken. The reason for the limits is that the federal government wants the person whose income is being garnished to be left with at least a minimum amount of funds with which to support himself.
Social Security Garnishment Exemptions
With the exception of garnishments from the U.S. Treasury, Social Security Benefits are exempt from garnishments. However, if you deposit your social security funds into a bank or checking account, it then becomes garnishable. In this circumstance, however, there is something you can do. You can file a motion with the garnishment court to exempt your Social Security Funds in that account from garnishment. If granted, which it most likely will, simply take the release of the garnishment to your bank and your monies in your account will be protected.
Veterans Benefits Garnishment Exemptions
Veterans benefits are exempt from garnishment unless the garnishment is for past due federal taxes, child support, or spousal support. There are other exceptions as well, but they are on a state by state basis as each state is allowed to set its own garnishment rules as long as they don't run afoul of federal garnishment statutes. Supplement Security Income benefits and other government benefits, generally fall into the same category as Veterans benefits with the same rules applying to them as well.
Normally, garnishments don't begin right away. Usually there is a bit of lead time to notify the debtor that a garnishment will be taking place.
The best way to avoid a garnishment or stop garnishment is to get together with the creditor and work out an agreement for what he is owed. Another, more drastic method, is to file bankruptcy.
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