Wage garnishment is when a portion of your monthly income is confiscated in order to gradually satisfy unfulfilled financial obligations – such as unpaid credit card debt, child support payments or taxes. In cases of debt originating from credit cards or most loans, your wages cannot be garnished without a court order. But that rule doesn’t apply to the government’s pursuit of income taxes, student loan payments, child support and alimony.
We often hear stories of people being surprised by wage garnishment, and this can indeed happen for a number of reasons. The first is a process known as “sewer service,” whereby debt collectors lie about sending proper notices and consumers wind up having summary judgments levied against them at court hearings they were not notified about. The second reason is the so-called “setoff” process, which enables lenders to exercise their right to collect unmade payments if you have the necessary assets, thereby removing funds from your bank account without court approval.