Individuals work hard in order to earn the funds that are necessary to support themselves and their families. For many individuals, purchasing necessary and desired goods and services will lead to the acquisition of debt.
Borrowers will eventually be required to repay the debt that they acquire. Due to unforeseeable circumstances, an individual may not be able to repay his/her debt. In instances such as these, creditors may use aggressive methods of collection, in order to retrieve the funds that they have lent a borrower.
For example, an individual may be required to foreclose his/her home, file for bankruptcy, or surrender his/her motor vehicle, in order to pay the debts that he/she has accumulated. One technique that is used by creditors is wage garnishment.
The term wage garnishment refers to the deduction of funds from an individual's income in order to repay acquired debts. Wage garnishments vary depending upon an individual's income, his/her debt, and the surrounding circumstances. In addition to creditors, the Internal Revenue Service is also permitted to levy a portion of an individual's earnings through wage garnishments, if an individual does not pay his/her taxes.
Each state has the authority to establish wage garnishment laws. While many states do not maintain or enforce this type of legislation, some states have established wage garnishment laws. Nevertheless, wage garnishment is ultimately regulated by federal legislation. If a state's wage garnishment regulations permit lenders to levy more than a specified amount, the federal regulations must be used.