Future Business Leaders of America (FBLA) Business Law Practice Exam

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Study for the FBLA Business Law Exam. Study with flashcards and multiple choice questions, each question has hints and explanations. Get ready for your exam!

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What is the legal procedure called through which a worker's earnings are withheld for payment of a debt?

Lien
Garnishment
Forbearance
Seizure

The correct answer is: Garnishment

Garnishment is the legal procedure that allows a portion of a person's earnings to be withheld by an employer to pay off a debt owed to a creditor. This process typically occurs after a court has issued a garnishment order, which legally directs the employer to deduct a specified amount from the employee's paycheck. This order usually comes into play after a creditor has successfully sued a debtor and has been awarded a judgment for the outstanding debt. In contrast, a lien is a legal claim against a property as security for a debt, but it does not involve direct withholding of wages. Forbearance refers to the act of delaying a debt payment, often during times of financial hardship, and does not relate to withholding wages. Seizure generally involves taking possession of an asset or property but is not specifically about garnishing wages or earnings. Thus, garnishment accurately describes the procedure where a worker's earnings are legally withheld to satisfy a debt obligation.