So many Massachusetts residents have been in a desperate financial situation where they need extra funds but are unable to find them. No matter if they get a raise at work, start looking into extra side jobs, or even begin selling some of our possessions, there is little to no way to repay a debt they may have incurred. Whether the amount of money is owed to a credit card, medical bills, or other debt, creditors will not stop until they have a way to get the money that is owed to them. Usually, they will first try to get payment through other means such as an installment plan, or demanding you produce the money from another source such as friends and family.
However, through a process called garnishment, creditors are able to get the money owed to them. There are defenses to a garnishment action that can be asserted but they must be presented by a debtor in a timely fashion. Below, we will take a look at the garnishment process and the possible short and long-term implications for a debtor.
What is wage garnishment in Massachusetts?
Wage garnishment is a process by which, in furtherance of collecting a debt, a court orders the debt paid through a structured repayment scheme where parts of the debt are deducted from the debtors’ paycheck.
Using a method known as attachment, your employer automatically deducts a pre-determined amount of money from an employee-debtor’s paycheck to satisfy the creditor. These funds are then sent to a creditor or authorized representative to help ensure the debt is paid. Following that deduction and any others, the remainder of the funds are then transmitted to the debtor as income.
Can all income be garnished?
Not all types of income can be garnished as Massachusetts law protects specified pension plans. One of the most common ways to do so is through wage garnishment where the creditor obtains a court order allowing them to garnish your wages. However, it is not the only way to do so as any creditor can also ask for a bank levy.
What kind of debts are collectible in Massachusetts?
Every sort of debt is collectible in the state of Massachusetts through a wage garnishment order. Whether these are from outstanding, delinquent credit cards, student loans, personal loans, back taxes, or unpaid child support and alimony. This means that you are liable for paying any debt you incur.
How do you obtain a wage garnishment order in Massachusetts?
Similar to many other states, the vast majority of creditors must obtain a court order entitling the creditor to a wage garnishment. For example, a hospital, credit card company, landlord, or other must first obtain a court order before proceeding to garnish your wages. On the other hand, there are other categories and situations where a court order is not necessary in order to pursue garnishment. These include back child support, unpaid income taxes, and student loans in default.
Following obtaining the order or being entitled to garnishment without an order in a special circumstance, the creditor will then contact your employer so that your wages can proceed to be garnished.
Are there any defenses available to a wage garnishment action in Massachusetts?
There are several defenses available to a wage garnishment action in Massachusetts. Creditors are unable to double-dip, that is, ask for and receive payment from the debtor and also obtain payment through wage garnishment. You can successfully avoid a wage garnishment action if you show one of the following:
- You have already paid the debt in full
- You have entered into a debt payment plan and are currently making payments
- The action would exceed state or federal limits on wage garnishment
What is the maximum amount of money that can be garnished from my paychecks under Massachusetts law?
In Massachusetts, there are statutory protections in place to help ensure the entirety of a debtor’s wages are not garnished. A creditor can obtain up to 15% of the debtors’ wages through wage garnishment. Another scheme wage garnishment under Massachusetts law can be calculated through is 50 times the greater amount of either the federal minimum wage or Massachusetts state minimum wage for each week a person earns their check or any portion of the week constituting a person’s weekly wage.
Currently, the federal minimum wage is $7.25 an hour and the Massachusetts minimum wage is $12.00 per hour. The court will likely choose whatever amount gets the creditor the greatest amount of money.
Does Massachusetts protect certain types of income from wage garnishment?
Yes, there are certain, limited types of income protected under Massachusetts law from wage garnishment. Pensions are generally exempt from wage garnishment actions. The types of pensions exempt under Massachusetts law are:
- Any plan maintained by a business or corporation under section 401 (a) of the Internal Revenue Code
- An annuity, pension, or profit sharing scheme subject to the federal Employee Retirement Income Security Act of 1974
- Any Simplified Employee Plan or Individual Retirement Account or annuity
- Any other qualifying plans
Given these exemptions, it seems that the Massachusetts legislature wanted to protect retirement income from wage garnishment actions.
Are there any federal wage garnishment protections?
Yes, although Massachusetts has a robust wage garnishment protection scheme, federal law also provides certain protections when a wage garnishment action has commenced. Most importantly, federal law protects a person from being fired for the first successful wage garnishment actions taken against them.
However, it does not protect a person from being fired for the second successful wage garnishment action. So, if your credit card company has successfully secured wage garnishment you are still protected from being fired. However, if you default on your second credit card and your other credit card company prevails then your employer is fully within their rights to fire you. Additionally, this only protects you from being fired for the reason of wage garnishment. It does not protect you from being fired for cause such as being late or not performing your job.
Federal law also provides protection in garnishment taking the form of a maximum of 25% of disposable income – that is, income after federal and state taxes, Social Security, Medicare, unemployment taxes and any state retirement deductions required by law are taken. Another scheme garnishment is calculated under is using the amount of money which constitutes disposable income as greater than 30 times the federal minimum wage by the hour.
Under federal law, these limits are absolute so they do not accrue upon each other no matter the amount of successful wage garnishment actions an individual has.
What about federal limits on wage garnishment on child support and alimony?
Federal law is much more liberal when it comes to garnishing wages for child support and alimony. A person’s disposable income can be garnished up to 50% if the person is currently supporting a spouse or another child. If that person is not, then that person’s disposable income can be garnished up to 60%. If there is any child support or alimony that is more than 12 weeks in arrears, there may be an additional 5% tacked on to the applicable scheme to satisfy the person’s obligation.
What should I do if faced with a wage garnishment action in Massachusetts?
You should never confront any legal proceeding alone. Working with a qualified legal professional, such as a wage garnishment attorney, you can ensure that your rights are protected. If you believe you are or are about to be the subject of a wage garnishment action, contact a qualified attorney today.