An assignment of wages is the transfer of the right to collect wages from the wage earner to a creditor. The assignment of wages is usually effectuated by deducting from an employee's earnings the amount necessary to pay off a debt.
An assignment of wages should be contained in a separate written instrument, signed by the person who has earned or will earn the wages or salary. The assignment should include statements identifying the transaction to which the assignment relates, the personal status of the assignor, and a recital, where appropriate, that no other assignment or order exists in connection with the same transaction.
Many jurisdictions have enacted statutory provisions concerning wage assignments that prescribe various requisites of or conditions to the validity of assignments of wages. Compliance with these statutes is essential to make such assignments effective.
The North Carolina Assignment of Wages Due or to Become Due is a legal agreement in which an employee assigns a portion of their future wages to a creditor as collateral for a loan or debt. This arrangement allows the creditor to receive payment directly from the employer before the employee receives their wages. The Assignment of Wages Due or to Become Due serves as a financial tool for both creditors and employees. Creditors can mitigate the risk of non-payment by securing repayment through the employee's wages, while employees can access much-needed funds or credit even if they lack traditional collateral. In North Carolina, there are primarily two types of Assignment of Wages Due or to Become Due: 1. Voluntary Assignment of Wages: This type occurs when an employee willingly enters into an agreement with a creditor to assign a portion of their future wages to repay a debt. The employee and creditor negotiate the terms of the assignment, including the percentage or fixed amount of wages to be assigned, repayment period, and any applicable interest rates. 2. Judicial Assignment of Wages: This type refers to a court-ordered assignment of wages typically associated with delinquent child support or spousal support payments. When an individual fails to meet their financial obligations, a court can authorize the assignment of their wages to ensure consistent payments to the recipient. North Carolina state law dictates certain guidelines and restrictions for the Assignment of Wages Due or to Become Due. For example, an assignment cannot exceed 25% of an employee's disposable earnings per week, unless granted otherwise by a court. Disposable earnings are the portion of wages remaining after legally required deductions such as taxes and Social Security. It is important for employees to understand the implications of entering into an Assignment of Wages Due or to Become Due agreement. They should consider the impact it may have on their financial stability and ability to meet other obligations. Employers, on the other hand, must comply with the court-ordered assignments and deduct the assigned amounts from the employee's wages as legally instructed. In summary, the North Carolina Assignment of Wages Due or to Become Due provides a means for employees to secure credit or repay debts while protecting the interests of creditors. Whether voluntary or judicial, it is essential for all parties involved to understand their rights and responsibilities under these agreements.
