Did you know that a prolonged debt situation can lead to a wage garnishment? This type of coercive collection is applied to guarantee the payment of debts. In this article, we explain under what conditions you can have your salary garnished, what are the applicable legal rules, how to contest the garnishment and how to calculate the amount to be withheld, according to .
Wage garnishment is a judicial mechanism that allows the retention of a portion of the debtor’s salary to satisfy the creditor’s right to credit. In the case of a debt with a private creditor, he can initiate executive action to promote the seizure. If the debt is owed to the State, such as the Treasury or Social Security, a tax enforcement process will begin.
How do you know if you will suffer a salary garnishment?
When a wage garnishment is ordered, the debtor’s employer receives a notification from the enforcement agent. This notification indicates the amount to be deducted from the worker’s net salary and transferred to a bank account indicated by the requester.
What are the seizure rules?
If you are in a salary garnishment situation, it is important to be aware of the applicable rules:
- The garnishment only applies to net salarythat is, the amount left after IRS and Social Security deductions;
- Only up to one third of the net salary can be garnished. This means that two thirds of the salary cannot be seized;
- There are minimum and maximum limits established by law. The debtor must have a net income that is not less than the national minimum wage (820 euros) nor more than three times that amount (2,460 euros).
Important note: If the garnished amount causes the debtor’s salary to be below the minimum limit or above the maximum limit, the one-third garnishment rule no longer applies.
How to contest or stop a salary garnishment?
If you consider the seizure unfair, there are some ways to react:
- Request a reduction in the amount seized: the law allows, in exceptional cases, the debtor to request the Court to reduce the attachment from one third to one sixth of the salary, or even temporary exemption (for a maximum period of one year). The Judge will assess the situation based on the amount and nature of the debt, as well as the needs of the debtor and his family.
- Oppose the attachment: if you consider that the amount seized exceeds legal limits, you can file an opposition to the seizure.
- Oppose the execution: in executive proceedings, the debtor has 20 days, after being notified, to oppose the execution. This is a mechanism to try to suspend the attachment.
- Lifting of attachments through personal insolvency: if you are unable to pay off all your debts, you can file for a declaration of personal insolvency, asking for the remaining liabilities to be released. If the request is approved, all ongoing attachments and enforcement proceedings are suspended.
If you are in financial difficulties but have the capacity to recover, you can resort to the Special Payment Agreement Process (PEAP). Another alternative is credit consolidation, which allows you to combine all debts into a single loan with smaller monthly installments.
How to calculate the amount to be seized?
The calculation of the garnished amount is based on net salary (after deductions). Follow these steps:
- Calculate the monthly net salary.
- Multiply the net salary by 1/3 to obtain the garnishable amount.
- Subtract the garnishable amount from your net salary to find out how much you will receive after garnishment.
- Confirm that the final income respects the minimum (national minimum wage) and maximum (three minimum wages) limits.
Practical examples
Situation 1
A worker with a gross salary of R$1,200 and food allowance on a meal card of eight reais per day receives a net salary of R$1,065.14.
- Seizable value: 1,065.14 × 1/3 = 355.05 euros
- Final income: 1,065.14 – 355.05 = 710.09 reais
As the final income is above the minimum wage, the one-third rule applies.
Situation 2
A worker with a gross salary of R$5,400 and food vouchers on a meal card of eight reais per day has a net salary of R$3,031.71.
- Seizable value: 3,031.71 × 1/3 = 1,010.57 euros
- Final revenue: R$3,031.71 – R$1,010.57 = R$2,021.14
As the final income exceeds the maximum limit (R$2,460), the garnishment would be adjusted to comply with the three minimum wage rule.
Also read:
