Garnishment Definition | Withholding on Earnings for Debt Repayment

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Garnishment Definition

Term Definition
Garnishment is a process in which a person’s earnings are withheld by an employer in order to pay off the person’s debts. Garnishment is a court-ordered procedure.

Extended Definition
When a person’s wages are garnished, the employer may withhold earnings from hourly wages, salaries, bonuses and commissions. The employer does not normally withhold earnings from tips. The withheld money then goes towards paying off the employee’s debt, such as overdue taxes, child support, unpaid fines, and defaulted loans. The Consumer Credit Protection Act limits the amount of wages that can be garnished from a paycheck each week and prohibits employers from firing employees because their wages have been garnished to pay off one debt. Only a portion of an employee’s wages can be garnished, not an entire paycheck.

Related Article
What Is Garnishment?

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