Wage Garnishment
What it is:
A wage garnishment is an obligatory payment of a debt where a portion of an employee's paycheck is automatically withheld to pay the debt.
How it works/Example:
Courts can set wage garnishments on individuals who become delinquent on their debt payments. Often, wage garnishments are given out when a person is delinquent on child support, spousal support, taxes or loans. If the debtor has a history of failing to pay, a wage garnishment can be implemented to automatically subtract money owed from his or her payroll without his or her consent. For example, if an individual becomes delinquent on $100 monthly loan payments, a wage garnishment automatically deducts the $100 from the person's paycheck and sends it to the lender.