What are wage assignments?

Our latest article goes into detail on wage assignments. Wage assignments are increasingly used in consumer contracts usually involving large transactions, and are often listed in the fine print to state the legal recourse or provisions of the creditor in the event that the buyer/debtor does not pay up the full amount.

It allows the creditor to garnish the debtor’s wages when he/she fails to settle on the owed amount, without having to go through the courts. Naturally, the debtor may be in for a shock when the normally faithful paycheck turns up short. But depending on the contract, there is often not much the debtor can do, since the contract has already been signed, and thus – regarded as “voluntary”.

That is why, the usual advice applies – Read the find print before you sign anything, and settle the owed sum as soon as possible. Fortunately, most state laws expressly forbid wage assignments, but it is still important to get more familiar regarding this form of garnishment.

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