If you received a Notice of Intent to Initiate Administrative Wage Garnishment (AWG), you must act quickly. You have a right to contest the garnishment action, but if you wish to have the garnishment action suspended pending a hearing on the matter, you must file a timely request for hearing. The key word here is “timely”, so its very important to understand the definition and to understand that it will depend on how you transmit that request. It works as follows:
Timely. A hearing request is timely if the request for hearing is postmarked (if mailed) or received (if not mailed – e.g., fax, commercial delivery service [FedEx] or in person delivery) within 15 days of date of the AWG notice. If the hearing request is timely, AWG cannot proceed until the hearing is completed and the decision is communicated to the debtor
Untimely. A hearing request is untimely if the request for hearing is postmarked (if mailed) or received (if sent any other way) more than 15 days after the date of the AWG. If the request is untimely, garnishment will not be stopped, unless the hearing decision is not issued within 60 days.
As you can see, filing your hearing request quickly is essential, but if you still missed the boat, don’t despair – Treasury rarely gets to the hearings in 60 days and so while it is not guaranteed that the garnishment will be stopped in the interim, it frequently still does get put on hold. Therefore, even if you failed to act within the 15 days, you may still have a shot and putting the garnishment on hold. Avoiding garnishment is well worth the effort because one you are being garnished ofttimes Treasury will not bother discussing voluntary payment options that might avoid the distress of a enforced collections.
Under federal law (31 U.S.C. § 3720D), your employer may not fire you, refuse to employ you, or take any disciplinary action against you because your wages are being garnished.
What is Administrative Wage Garnishment?
Administrative Wage Garnishment (AWG) is a debt collection process that allows a federal agency to order a non-federal employer to withhold up to 15 percent of an employee’s disposable income to pay a non-tax delinquent debt owed to the agency.
How Does It Work?
Treasury, on behalf of the federal agency, is authorized to issue a wage garnishment order to collect the debt. Under federal law, a court order does not need to be obtained. The employer will be required to send the amounts deducted to Treasury for payment to the federal agency. The AWG process is governed by federal law. State laws do not apply.
Do I have a right to object to the garnishment?
A debtor is entitled to a hearing before AWG begins if it is requested within 15 business days after the AWG notice letter is mailed. The federal agency may continue the AWG process if a hearing is requested after the 15-day period. A hearing may be requested concerning the existence or amount of the debt, or the terms of the proposed repayment schedule under the garnishment order (hardship).
The federal agency will determine whether the hearing will be oral or written. If the agency decides to hold an oral hearing, the agency will decide when and where the hearing will be held, and the debtor may decide whether the hearing will be in-person or by telephone. The debtor will have to pay any travel expenses for an in-person hearing.
To request a hearing regarding the terms of the repayment schedule (hardship), a financial statement with supporting documentation must be submitted with the hearing request form received with the notice letter.
How much will I be Garnished?
Up to 15% of your disposable income. Disposable pay includes, but is not limited to: salary, overtime, bonuses, commissions, sick leave and vacation pay. Determining how much you have at risk can be complex. If section 2(a) of the Wage Garnishment Order specifies the dollar amount to be garnished, it will control. However, if you have not yet been garnished, the Wage Garnishment Calculator will help you determine what may be taken to pay your debt.
No matter what, you can keep an amount equal to 30 times the minimum wage. The minimum wage as of July 24, 2009 is $7.25/hour. This means that 30 x 7.25 = $217.50 is protected per week.
Note – The Wage Garnishment Calculator is provided by the Bureau of the Financial Service and the Perliski Law Group makes no representation or warranty as it accuracy. Use of the Calculator should be limited to general information only and is not a substitute for legal advice on this important issue.