Garnishment When You Don’t Earn Wages

When you are behind on your debt, your creditor may seek a judgment to have your wages garnished. However, if you are self-employed and don't earn a regular wage, that doesn't mean you are off the hook. The employer can still try to get the money out of you by obtaining a non-wage garnishment. This type of garnishment can be particularly burdensome to you as a self-employed person. Here is more information about these garnishments and how they work so that you can be more informed and prepared.

Garnishment vs Non-Wage Garnishment

Garnishment is when a creditor puts a lean on your wages through your employer. Generally, the amount garnished is limited to a certain percentage or amount of your income. The garnishment lasts until the debt is completely paid. Non-wage garnishment is used if you don't have a regular income, such as being self-employed. This is usually a one-time garnishment for the complete amount owed. These garnishments often attach to your bank account or other property.

Common Reasons For Garnishment

Your wages or assets can be garnished for a wide variety of debts. The most common type of debt includes being behind on your student loan, child support payments, taxes, and consumer debts. Some creditors must sue you, first, before they can obtain a garnishment. However other entities, such as the state and federal government, can impose a garnishment without going to court. However, before they can start taking out money or freezing your assets, creditors must notify you within a specific time frame.

Possible Protections

As a self-employed person, you have much less protection against non-wage garnishments than a regular wage employee. Your bank accounts can be completely emptied, and other property may also be seized. However, there are some ways you may still be protected by federal laws. 

For example, some of your assets, such as annuities, Social Security Income or welfare income, may be protected. If you can prove that your bank account contains those types of incomes, then you can ask for an exemption. Depending on your state, there may be limits as to how much a creditor can collect from personal bank account or other personal assets.

If you owe a debt that you have not paid on time, and you're self-employed, then a creditor can force you to pay through a non-wage garnishment. These types of garnishments can create a hardship and are often very complicated. Contact an attorney who is knowledgeable about garnishments to help you through the process so that you don't lose everything you have worked hard for.

For more information, contact a lawyer like Stuart J Sinsheimer Attorney at Law.