A wage assignment is an act of taking money directly from an employee's paycheck in order to pay back a debt obligation. Wage assignments may be either voluntary or involuntary, depending on the situation.
Such an automatic withholding plan may be used to pay back a variety of debt obligations, including back taxes, defaulted student loan debt, and both child and spousal support payments.
A wage assignment is typically a last resort of a lender to receive repayment from a borrower who has previously failed to pay a debt obligation. A wage assignment, when involuntary, may also be referred to as wage garnishment and requires a court order.1
Wage assignments are typically incurred for debts that have gone unpaid for a prolonged period of time. Wage assignments can be divided into two categories: voluntary and involuntary. Employees may sometimes opt for a voluntarily wage assignment to pay for things like union dues or to contribute to a retirement fund.
Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.
