From time to time people find themselves in a predicament where they cannot pay their dues.
Depending on which state you reside in, garnishment laws exist to ensure that creditors who are owed money are paid if the debtor is unwilling to enter into a voluntary agreement to repay the debt.
Garnishment is the process where one's wages are withheld or deducted in order to satisfy a debt.
This is usually done by court order and the creditor must prove that he or she attempted to get the debtor to pay voluntarily but was unable to get an agreement or the agreement was broken.
When we think of the term garnishment we immediately think of the IRS but strictly speaking garnishment is not limited to the IRS alone.
Any other creditor, whether public or private or even a federal government department can seek wage garnishment.
Ex-spouses also can sue in a court of law for unpaid alimony and see garnishment.
Another term used to refer to garnishment and also one that is less friendly is asset seizure.
This is also a term mostly associated with the IRS when they seek to recover back taxes through a court order.
While asset seizure and wage garnishment do not necessarily mean the same thing, they are nevertheless terms that invoke fear.
Asset seizure need not be done through the employer but can be accomplished by working with the banks and investment institutions where the defendant's assets are housed or invested.
In asset seizure the IRS sometimes uses agents who can physically pay a visit to the defendant's premises and physically retrieve assets.
Garnishment is done in conjunction with the employee's payroll process.
The court requires that an assessment be done of the defendant's assets and liabilities to determine the amount that will be garnished.
The law stipulates that dues owed to the federal government be collected first.
Then next is any monies due to State and Local tax authorities and then lastly any other amounts for instance credit cards.
Not all states allow garnishment of wages.
States such as Texas, Pennsylvania and North Carolina, only allow wage garnishment for federal taxes, court ordered fines, federal student loans and child support .
Others allow garnishment on almost any kind of debt including debts from private creditors and collectors.
The law also offers some protection to debtors.
Garnishment cannot exceed more than 25% of the disposable earnings of the defendant in most cases with the maximum being 50%.
The debtor is also required to fill out an asset and liability assessment form to determine his or her living expenses.