Description: Garnishment is a legal procedure that allows the retention of a portion of a person’s or entity’s income, usually as a result of a court order. This mechanism is used to ensure compliance with financial obligations, such as debt repayment or child support. In the context of finance, garnishment can be relevant when an individual or organization has outstanding debts and their income, generated through various means, is subject to retention. Garnishment can be applied to bank accounts, wages, or income from commercial activities. It is important to note that garnishment does not imply the confiscation of assets, but rather the retention of a portion of income until the payment obligation is fulfilled. This process is regulated by specific laws that vary by jurisdiction, and its execution must follow an established legal procedure to ensure the rights of all parties involved. In business operations, garnishment can affect cash flow, as it limits available resources for investment and growth, which can have repercussions on the financial security of the entity.
