Process

• Companies must first make all reasonable attempts to collect a debt from an individual, and the debtor can settle the claim by paying off all fees, charges and principal. If a company cannot recover its' money, the business will file suit in a local or state court to obtain a judgment against the debtor. If the judge finds in favor of the plaintiff, he will require the debtor to pay off all owed monies. If the debtor still does not make timely payment, the company can obtain a writ of garnishment from the court that will result in deductions from the worker's paychecks until he has paid off the judgment.
  
  

Limits

• Title 15, Chapter 41, Subchapter II, Section 1673 of the U.S. Code limits wage garnishments to 25 percent of a worker's disposable weekly earnings. As of March 2011, workers can only have their paychecks garnished if their weekly wages exceed 30 times the federal minimum wage of $7.25 an hour. A court can order a wage garnishment of up to 60 percent of an employee's paycheck if he also owes child support.
  
  

Exceptions

• Some states set lower limits of wage garnishment than federal levels or don't allow creditors to garnish worker paychecks at all. According to BCS Alliance, companies cannot pursue a wage garnishment order from a local or state court in North Carolina, Pennsylvania, South Carolina and Texas. Florida allows heads of households with dependent children to shield up to $750 per week from garnishment. Debtors should check their state statutes or consult with an attorney to determine local garnishment limits and exemptions.
  
  

Statute of Limitations

• All debts are subject to statutes of limitations where the company cannot try to collect on a debt or garnish an individual's paycheck past a certain time. This time window varies between states and depends on the nature of the transaction. For example, most states allow a lending company to collect a debt on a contract within 10 years according to Fair Debt Collection. If an individual owes a credit card debt, the debt will not be time-barred unless three to six years have passed, depending upon the state.