What it is:
How it works (Example):
Let's say John Doe has stopped paying childto his ex-wife. His ex-wife takes him to court for the owed and obtains a garnishment, whereby the court seizes a portion of John's monthly paycheck and automatically gives it to his ex-wife.
One of the most common forms of garnishment is wage garnishment. Wage garnishment is often used to recoup back taxes, delinquent child support or judgments, and the courts have the ability to garnish not just wages, but bonuses, commissions, pension income and distributions from retirement plans. Welfare, unemployment, veterans benefits, social security income, workers compensation and child support payments generally cannot be garnished.
The Consumer earnings are being garnished, though there are exceptions.Protection Act prohibits employers from firing employees just because their
Why it Matters:
Garnishments generally require a court order, and they can destroy a person's credit rating. It is important to that not all things can be garnished; state laws set forth the exemptions. Usually, state laws prohibit garnishing a person's assets to the extent that they leave the borrower with no way to himself or herself.