Garnishment

Accounting Terms Dictionary

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Garnishment

Garnishment is deducting part of a person’s salary to pay a legal debt. To garnish means to attach money belonging to a debtor while it is in the hands of a third party.

For example, Mary, a Texan resident moves to Michigan and does not pay her $500 a month child support. In the meantime, her family collects welfare payments totaling $15,000. When the State of Texas finds Mary they will deduct money from her paycheck until she has repaid the entire $15,000 her family received while she was in arrears in child support. They garnished her pay. In another example, the court found John guilty of $3000 worth of damage to his neighbor’s yard. If John doesn’t have the $3000, the court may order that monthly payments be taken out of his paycheck and sent to his neighbor until the debt is paid. This is called garnishment.

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