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Starting a Wage Assignment. You must be at least 40 days behind on your loan before the creditor can have your employer start taking money out of your paycheck. First, the creditor must mail you and your employer a Notice of Intent to Assign Wages 20 days before they can make the demand.
Lenders get a wage garnishment by taking the borrower to court. Wage assignments do not go through the courts. Instead, the lender just sends the borrower a notice & begins taking a portion of their wages.
A wage assignment take funds directly from an employee's paycheck to pay back a debt. Wage assignments may be either voluntary or involuntary. A wage assignment, when involuntary, may also be referred to as wage garnishment and requires a court order. 1?
Definition and Example of Wage Assignment Borrowers may agree to allow a lender to use wage assignments, for example, when they take out payday loans. The wage assignment can begin without a court order, although the laws about how much they can take from your paycheck vary by state.
This development is important for multistate employers because Illinois is the only state with a statute that clearly and unequivocally provides that employers must honor contracts employees make with third parties to assign wages. Under the Illinois Wage Assignment Act, 740 ILCS §§170/.