International Baccalaureate (IB) Practice Exam

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What is paycheck garnishment?

A process of taking back property for failure to make payments.
A mortgage holder selling a property due to missed payments.
A procedure for managing debt problems.
A court-ordered attachment that allows lenders to withdraw directly from paychecks.

The correct answer is: A court-ordered attachment that allows lenders to withdraw directly from paychecks.

Paycheck garnishment refers to a legal process whereby a creditor can obtain a court order to deduct funds directly from an individual's wages to satisfy a debt. This process occurs when a debtor fails to fulfill the terms of a loan or other financial obligation, and the creditor seeks to recover the owed amount through court intervention. The employer is typically responsible for withholding the specified amount from the debtor's paycheck and sending it directly to the creditor. This answer is validated by the fact that paycheck garnishment is specifically a method of debt recovery where the lender has legal permission to take money directly from a debtor's earnings, ensuring the creditor receives payment. The other choices reflect different financial processes but do not accurately capture the essence of paycheck garnishment as a direct withdrawal from wages.