Taking money from a paycheck before you ever get to see it for debt owed is known as garnishing wages. This can be applied to checks involving payroll, investment payments, or even royalties. If someone owes back taxes, those taxes can be garnished.
In any legal settlement in which monies are owed, garnishing can occur. Child support payments are one of the instances where wages are garnished if the person owing such payments does not comply with a court decision. If a person agrees or is ordered to pay support to a former spouse and fails to comply, wages can also be garnished.
Failure to pay student loans can result in garnishing of wages or monies from income tax returns.
Some states only garnish wages involving state or federal taxes, child support, federally backed student loans or damages cited in a criminal or civil suit in a court of law.
Numerous states have restrictions on amounts that can be garnished, but there is no state that can prohibit the garnishing of wages.
The hiding of monies or assets in regard to the garnishing of wages is illegal. People who are paid in cash and do not report these wages can face criminal prosecution.
Even if you work as an independent contractor and sign a 1099 form for tax purposes, you cannot escape paying your debts. If you fail to pay your federal or state taxes, student loans or any other court ordered payment or settlement and you are caught hiding wages or payments of any kind, you can be prosecuted for fraud in criminal court.
Promote or Save This Article
If you like this article, please consider bookmarking or helping us promote it!
Print It | Email This | Del.icio.us | Stumble it! | Reddit |
Related Posts
- What is an Elective Deferral Contribution?
- Understanding Aggregate Supply
- Contributing to a SEP IRA
- Understanding Modified Adjusted Gross Income (MAGI)
- What is Opportunity Cost?
Subscribe by Email
{ 0 comments… add one now }