What is a wage garnishment and when is it typically pursued?

• A. A court-ordered deduction from wages to satisfy a debt, usually after obtaining a judgment and subject to exemptions by state law.
• B. A court order to seize real estate immediately after default.
• C. An automatic increase in wage deductions regardless of judgment.
• D. A voluntary payroll deduction offered by the debtor.

Answer: (A)

Wage garnishment is a court-ordered withholding from a worker’s pay to satisfy a debt. It typically happens after the creditor has earned a judgment in court, and the amount that can be taken is limited by state exemptions to protect a portion of the debtor’s income. The employer must deduct the specified portion from wages and send it to the creditor until the debt is paid or exemptions apply.

This isn’t an immediate seizure of real estate after default—that process involves foreclosure or other property-related actions, not wage garnishment. It isn’t an automatic increase in deductions without a judgment, since a court order is needed. It also isn’t a voluntary payroll deduction paid by the debtor, which would be a voluntary arrangement rather than a forced, court-ordered action.