You may be able to pinpoint the exact moment that your financial future took a nosedive. It might have been the carefully targeted loan solicitation in the form of an already-executed check for a couple grand awaiting only your signature to cash.

You remember how it spontaneously appeared in your mailbox just before the holidays last year, mixed in with the greeting cards and monthly bills. Perhaps you cashed it that very day, pleased that you now had some spending money for family gifts.

But it’s likely that after reading their usurious terms — interest rates of almost 40 percent, questionable “loan origination” and “documentation” fees — you debated with yourself awhile before succumbing to the lure of fast money.

Once cashed, you’re on their hook

Sure, you meant to pay it back. But coming up with the extra hundred-and-change every month on top of the bills you were already struggling to manage was tough. Inevitably, you fell behind on your repayment plan.

The creditor calls began in earnest, and eventually, the loan company got a judgment against you. But the situation has gone from bad to worse, as now the company has initiated wage garnishment proceedings that will leave your wallet way too light. Worse, your boss is annoyed that payroll now must handle the garnishment.

Is all of this legal?

Unfortunately, it likely is. But there are rules and limits to wage garnishments that must be followed. They include:

  • Federal garnishments are limited to one-quarter of debtors’ disposable weekly incomes.
  • Child support garnishments can be as much as 60 percent, however.
  • Courts can garnish the sum of the weekly disposable income that’s 30 times that of the nation’s minimum wage.
  • Income from multiple jobs is subject to garnishment.
  • Single garnishments are not a legal reason for your employer to terminate you, but if you rack up two or more, they can show you the door.

If all of this is overwhelming you and straining your resources, you may wish to consult a Wisconsin bankruptcy attorney to review your wage garnishment and advise you how to proceed.

Source: Findlaw, “Wage Garnishment,” accessed Sep. 08, 2017