Steps To Relieving and Reducing Your Wage Garnishment

Are you currently being garnished at 25% of your wages? Or a 1099 employee being garnished at 100% of your total earnings. The same rules would apply to 1099 employees, normally 100% of your wages are garnished but you will have the option of a reduction of 25% or lower.  Having a wage garnishment can be scary and you may feel defeated but these are the steps you can take to help you today.  

As the designated family accountant many of my family members come to me asking my advice in their financial matters. Recently, my cousin Teddy, asking me to him with his wage garnishment on the State Level for a Gear debt for an old outstanding student loan debt. Here is how I helped to create an effective wage garnishment reduction request.

What is a Wage Garnishment

A wage garnishment is a court judgment mandating that a portion of your income be diverted to resolve a debt. Normally, the taxpayer is mailed three notices before the debt becomes a wage garnishment. The type of garnishment I will be covering today is Tax debt and Gear Debt.

Tax Debt

Tax debt is the outstanding balance of owing taxes after filing or being audited by the IRS or State government.

What is Gear Debt

In South Carolina, we have this thing called Gear debt. G.E.A.R stands for Governmental Enterprise Accounts Receivable.

Organizations and governmental entities including:

• State agencies, boards, committees or commissions
• Public and private* institutions of higher learning
• Housing authorities
• Political subdivisions
• Other governmental or quasi-governmental entity of any US state

*** In short, any entity that receives state funding could turn you into the South Carolina Department of Revenue.

Step 1

The first step is making sure you are current with filing taxes. It’s important to be compliant before requesting a wage garnishment reduction. If you are not current with filing your taxes, you would have to be current before asking for a reduction.  In the event of filing taxes and you are due a refund, your refund will be applied to the debt in 4-6 weeks. Unfourtantly, in most cases your wage garnishment will continue until that payment post.

Step 2

If you are current with filing your taxes, you could ask for a standard reduction. A standard reduction for tax debt is 25% to 12.5% of your gross pay and a standard reduction for gear debt is 25% to 10% of your net pay.

The second step is asking for a hold letter while you put in your request for a reduction in wage garnishment. If you need help writing one ( Click Here. )  Requesting a hold of garnishment would allow your paycheck ton go back to normal. Depending on your payroll this may take effect immediately while others like ADP could take effect the next pay period.  Please keep in mind that hold letters aren’t guaranteed it all depends on who you are speaking with on that day. It’s important to be calm on the phone and speak clear and friendly.  You will only be allowed the time that the agent gives you to get your paperwork to them. Failure to submit your paperwork will result in the garnishment continuing.  If you quit or if you are fired from your job will result in 100% of your wages being withheld.

In conclusion,  having a wage garnishment can be scary but there are things you can do to help. When requesting a reduction it’s important to be in compliance with filling your taxes. Next is asking for a hold letter while you put in your request for a reduction in wage garnishment. If you need help writing a wage garnishment click here. 

P.S: If you need a print out of a step by step guide to handling this situation. Click here. If you need help writing your wage garnishment reduction request (Click Here). You may also feel like ” Now how the hell am I gonna survive with a garnishment? If you click here, I can show you how to budget with your new income. If you have anything to add, let me know in the comments below. I love hearing from you guys.