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Wage garnishments may collect debts for companies

On Behalf of | Jan 31, 2022 | Collections |

Companies can’t make ends meet and remain successful if they allow customers to obtain goods and services without paying for them. When the business allows people to make purchases on credit or through a billing system, there’s a chance that the person won’t make the payments.

Having to try to collect on debts isn’t an easy task. It can be time-consuming and it requires that you follow specific laws and regulations. Taking someone to court and getting a judgement for the balance due is a step in the right direction. Some people will pay that off, but you have the option of a wage garnishment.

How does a wage garnishment work?

A wage garnishment is a legal order from the court that requires an employer to hold back some of the employee’s pay and send it in to pay off the debt. There are limits to how much the employer can withhold.

The garnishment will include a specific percentage of the employee’s wages to withhold. There are strict limits for what percentage can be held based on the type of debt. The employer has to begin withholding at the stated time and can face fines and other legal issues if they don’t withhold or fail to pay the garnished wages as instructed.

Any business that has outstanding accounts receivable may choose to take legal action to get those debts paid if they’ve gone delinquent. Making sure that you get the money you’re due can sometimes take a little extra effort. Working with someone who’s familiar with garnishments and how to handle them can make this process a little easier so you can focus on other areas of your business.