Creditors in Illinois, like in the rest of the country, can garnish salaries to pay off their debts. 735 ILCS 5/ Code of Civil Procedure of the Consolidated Statutes of Illinois is the Illinois state statute that oversees the wage garnishment process.
Can a debt collector garnish your whole paycheck?
Creditors, on the other hand, are unable to confiscate all of the money in your paycheck. The amount of your income that can be garnished is determined by many laws and legal constraints. The amount of judgment creditors can take, for example, is limited by federal law. The garnishment amount is limited to either 25% of your disposable weekly earnings (what’s left after mandatory deductions) or the amount by which your disposable weekly earnings exceed 30 times the federal minimum hourly rate, whichever is less. Some states limit the amount of your salary that can be garnished to a certain percentage. California law also takes the state minimum wage and a separate multiplier and splits it in half, resulting in less money being garnished.
The creditor will continue to garnish your earnings until the amount is paid in full or you take action to halt it, such as filing a claim with the court. The quantity of money you can keep is determined by the exemption laws in your state. Depending on your circumstances, you may be able to keep some or all of your money. Filing for bankruptcy may also be able to stop most garnishments.
How long before a creditor can garnish wages?
Garnishment is a legal process that creditors utilize to recover debts owing to them. It is typically used when accounts are at least six months past due and the debtor has made no effort to reach an agreement on a repayment plan.
Is Illinois a garnishment state?
A creditor can deduct (garnish) a certain amount of your wages to satisfy a debt under Illinois law. Consumer creditors, such as credit card companies and hospitals, must first obtain a money judgment against you, and even then, they can only deduct 15% of your salary.
How do creditors find out where you work for garnishment?
Getting a new job is thrilling since it brings with it new chances, more money, and a more promising future. However, that new position may result in bill collectors calling your office and demanding that you fork over all of that extra cash. You might be surprised to learn that bill collectors are aware of your new job even if you haven’t informed them. Here are a few ways debt collectors learn about new jobs, as well as some recommendations on how to secure your new money.
The Employment Number is a vast database that stores all (or nearly all) of your work history and salary information, which you probably aren’t aware of. Equifax owns this corporation, which collects and shares data on workers around the country. Over 20,000 employers use The Work Number to verify your employment history so they don’t have to deal with calls from businesses, landlords, and lenders. All they have to do is call The Work Number, and they’ll get the information they need. However, if your workplace utilizes The Work Number (as many large firms do), your information will be uploaded to this database, and debt collectors will be able to use it to find out where you work. But don’t worry; if a debt collector discovers your workplace and contacts you, you can stop them. Simply inform the debt collector that you do not wish to be contacted at work in a letter. Don’t worry, the debt collector won’t be able to garnish your pay just because they know where you work; they’ll require a court order.
LinkedIn, Facebook, Twitter, and other social media sites are excellent for keeping in touch with friends and family as well as meeting new people. It’s also a good technique for debt collectors to keep an eye on you and gather data about your life. Some debt collectors are employing social media as part of their debt collection approach. They may use social media to look for, watch, and even follow debtors in the hopes of spotting signals that the debtor has enough money to pay their expenses. As a result, if you tweet or post about your new employment, you can expect a debt collector to notice it and do the necessary investigation to figure out where you work.
Some debt collectors will use social media to gather information about you from your friends, family, and neighbors. They may not reveal that they are a debt collector; instead, they may pose as an old acquaintance or classmate. Although several large lenders have stated that they do not consider these procedures to be ethical, some debt collectors continue to utilize them.
While modern debt collectors employ a variety of devious tactics to learn where you work and obtain your funds, there are certain steps you may do to safeguard yourself.
- Request a copy of your Work Number report. The Work Number is comparable to a credit report, but it only collects information about your employment. You are entitled to a free annual report from the Work Number; all you have to do is ask for one. Examine the report to determine if your new position is included. You should also check to verify if the report’s other employment information is correct.
- Don’t use social media to announce your new employment. In person or over the phone, inform your friends and family about your new work. Avoid discussing your employment and/or pay on the internet. Avoid mentioning the acquisition of a new home, car, or vacation because all of these items indicate to the bill collector that you have money.
- Tell your loved ones to remain silent. Tell your loved ones not to share any personal information about you with strangers, no matter who they claim to be.
- Make a bankruptcy filing. Debtors will not be able to collect on a debt you owe if you file a Chapter 7 or Chapter 13 bankruptcy. You may be able to dismiss many (if not all) of your unsecured debts in bankruptcy if your circumstances justify it.
It’s essential to keep quiet about your new job and advise your friends and family to do the same to protect yourself from creditors trying to figure out where you work.
How much can legally be garnished from your wages?
Creditors that have a statutory right to collect past taxes, child support, or student loans, as well as judgment creditors (those who have filed a lawsuit against you and won), can garnish or “take” money immediately from your paycheck. They can’t, however, take it all. The amount a creditor can garnish is limited by federal and state law.
Federal Wage Garnishment Limits for Judgment Creditors
If a judgment creditor garnishes your wages, federal law states that it can only take the following amounts:
- whichever is smaller, the amount by which your income exceeds 30 times the federal minimum wage.
By removing required deductions from your entire payment, you can calculate your disposable income. Federal and state taxes, state unemployment insurance levies, Social Security, and mandated retirement deductions are all examples of required deductions. Health and life insurance, charitable donations, savings programs, and other optional deductions are not included.
EXAMPLE
The federal minimum wage is currently $7.25 per hour (as of July 2020). After mandatory deductions, if you earn $600 per week, 25% of your disposable income is $150. Your income surpasses 30 times $7.25 for a total of $382.50 ($600 – 217.50). That implies a maximum of $150 can be deducted from your weekly salary.
Wage Garnishment Limits for Student Loan Debts
To collect on defaulted student loans, the US Department of Education or anybody collecting on its behalf can garnish up to 15% of your disposable income. These agencies do not have to sue you first and obtain a judgment before garnishing your wages, but they must provide you advance notice of the garnishment.
Wage Garnishment Limits for Child Support or Alimony
Since 1988, all new or modified child support orders, even for non-delinquent child support, have included an automatic wage withholding order. Child support is deducted from your paycheck and sent directly to the other parent by your employer. If you are forced to keep your child’s health insurance coverage, the cost will be collected from your paycheck as well. Without resorting to wage withholding, you and the other parent can agree to pay child support on your own.
If you are currently supporting a spouse or child who isn’t the subject of the order, up to 50% of your disposable income can be withheld to pay child support. If you don’t support a spouse or child, you could lose up to 60% of your wages. If you’re more than 12 weeks behind on your payments, you can get an extra 5%.
Wage Garnishment Limits for Tax Debts
Wage garnishment has varied limits depending on the taxing authority. The amount is determined by the number of dependents you have and your standard deduction amount. Formulas are often used by state taxing authorities. The IRS will send you a notice before garnishing your wages, but it is not required to obtain a judgment beforehand.
State Wage Garnishment Limits
States can provide greater protection to debtors in wage garnishment cases than the federal government, but they cannot provide less. Many states follow federal guidelines, although some states protect a debtor’s wages to a greater extent. In Massachusetts, for example, most judgment creditors are only allowed to garnish up to 15% of your salary.
The Head of Household Exemption and State Wage Garnishments
A state provision called the head of household exemption allows you to keep more of your earnings. It is available to judgment debtors who are the family’s major source of financial support. However, not all states have a head of household exemption, and the amount of disposable income that is exempt can range from 100% to 90%, or be the amount necessary for your family’s care and support.
Claiming a Head of Household Exemption
Keep in mind that in most circumstances, earning the head of household exemption isn’t automatic. In many places, you’ll need to file documentation with the court to obtain the exemption. It’s possible that you’ll have to protest to the garnishment as well. If you don’t follow your state’s rules, the judgment creditor will most certainly acquire more of your wages than the creditor is legally entitled to.
It’s critical to figure out what you need to do to safeguard your income as soon as you receive a wage garnishment notification or order—especially if you have family members who rely on you. The response time will most likely be brief, perhaps a few days.
Reading any papers that is given to you carefully is a great place to start. It could include information about your alternatives or even the documents you’ll need to fill out. If not, local courts frequently offer instructions on their websites. You can also contact the sheriff or constable in charge of serving collection actions, as well as the court clerk. Many courts also offer self-help services on a weekly basis. If you still can’t locate what you’re looking for, talk to a lawyer in your area.
What is non wage garnishment?
A non-wage garnishment is a creditor’s post-judgment attachment of the judgment debtor’s property that is in the possession, custody, or control of third parties, other than wages. A non-wage garnishment is a collection strategy that allows a creditor to put themselves in the shoes of a debtor and recover assets owing to them. This is a limited proceeding that should be utilized with caution because these types of proceedings can only be started if certain conditions are met. The benefit of this sort of process is that creditors can obtain assets worth more than what can be deducted from a debtor’s earnings, if the assets are not exempt. A non-wage garnishment could include a demand for the sale of business equipment to pay off all or part of a debt.
The garnishor is the party who the creditor believes is holding assets or property of the judgment debtor or is indebted to the judgment debtor. The garnishee is the name given to this group of people. The scope of a non-wage garnishment is limited, and the affidavit for garnishment does not cover all liabilities owing to a judgment debtor. A non-wage garnishment can only affect two types of assets: (1) a debt for which the judgment debtor might have legitimately maintained a proceeding against the garnishee, and (2) property belonging to the debtor in the garnishee’s possession, control, or custody.
Furthermore, the debt must be lawful rather than equitable. Non-wage garnishments, for example, do not apply to equitable estates or beneficial interests; only tangible, legal debts are. In addition, the debt must be payable at the time the non-wage garnishment is initiated. Furthermore, the judgment creditor must have a reasonable belief that the garnishee is holding assets belonging to the judgment debtor, and the garnishee is not permitted to go on a fishing expedition to locate the judgment creditors’ assets. If the non-wage garnishment does not meet the whole judgment, unlike various post-judgment collection methods, this process cannot be transformed into a citation to find assets. Finally, the non-wage garnishment generates a lien, although it is only temporary. The garnishment lien only applies to funds in the garnishee’s possession at the time the garnishment summons is served, and it retains a lien on those funds during the garnishment action. The emphasis has been added. See 735 ILCS 5/12-707 for further information (a).
What states do not allow bank garnishments?
- Wage garnishment and bank account seizures are more important than ever for consumers to understand.
- Wages and other funds deposited in a consumer bank account are protected by state law.
What states do not garnish wages?
The most prevalent sort of garnishment is wage garnishment, which is the process of withdrawing money from an employee’s monetary compensation (including salary) in response to a court order. Wage garnishments may continue until the debt is paid in full or until payment arrangements are reached. Garnishments can be used for any form of debt, but the following are some instances of common debts that result in garnishments:
Garnishments are taken as part of the payroll process when served on an employer. When processing payroll, there are situations when the employee’s net salary is insufficient to cover all of the garnishments. For example, in a case involving federal tax, local tax, and credit card garnishments, the federal tax garnishments would be taken first, followed by local tax garnishments, and finally credit card garnishments. Employers are given notice to withhold a particular amount of their employees’ salaries for payment, and they are unable to reject. Employers must compute the amount to be withheld appropriately and make the deductions until the garnishment period ends.
Wage garnishment can have a detrimental impact on your credit, reputation, and ability to get a loan or open a bank account.
Currently, four states in the United States—Pennsylvania, North Carolina, South Carolina, and Texas—do not allow wage garnishment for any reason other than tax debt, child support, federally insured student loans, and court-ordered fines or restitution. The federal garnishment limit is the lower of (A) 25% of one’s disposable earnings (what’s left after mandatory tax deductions) or (B) the total amount by which one’s weekly wage exceeds thirty times the federal hourly minimum wage on a weekly basis (with some exceptions like child support and student loans). Several additional states have lower maximum thresholds than the federally mandated maximums. In some cases, states may outright prohibit garnishment. In Florida, for example, wages of someone who provides more than half of the support for a child or other dependant are completely immune from garnishment (though this is subject to waiver). Debtors can also prevent wage garnishment by taking out loans and negotiating with creditors.
Wage garnishment is prohibited in Minnesota for five reasons: social security benefits, retirement benefits, welfare payments, workers’ compensation benefits, and income related to disability or unemployment insurance.
The writ is known as a Writ of Sequestration in various states when the person is a government employee or appointment. These are handled in the same way as garnishments by the courts and are subject to the same wage exemptions.
It is possible that terminating an employee to avoid managing a levy is a criminal violation in the United States. An employer who knowingly terminates an employee in conjunction with a garnishment of the employee’s pay faces a punishment of up to $1,000 and a year in jail under federal law.
Can my bank account be garnished without notice?
Is it possible for a creditor to seize your bank account without your permission? Yes, a creditor can garnish a judgment debtor’s bank account without notice in most states.
