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Wage garnishment takes many people by surprise. They are unaware that their state allows creditors to garnish their wages. Unfortunately, many states allow judgment holders and other creditors to take a portion of a person’s earnings until a debt is paid in full. For many people, losing even some of their earnings each pay period can cause a significant financial hardship. Talking with a wage garnishment attorney is the best way to learn about your legal rights and the options for stopping wage garnishment.
Wage garnishment is a legal process. It allows a creditor to seize a portion of your earnings each pay period. Your employer deducts the amount from your paycheck and sends the money to the creditor.
Your wages could be garnished to pay debts including, but not limited to:
Each state has laws regarding wage garnishment. Therefore, the rule for garnishing wages depends upon where you live. Therefore, speaking with a wage garnishment attorney in your state is essential.
Generally, most creditors must file a lawsuit and obtain a judgment before they can garnish your wages. Otherwise, the creditor has no legal right to take money from your paycheck or bank account. Therefore, the creditor would file a debt collection lawsuit with the court.
You are served with the lawsuit and given a specific number of days to respond to the lawsuit. If you do not file an answer or respond to the lawsuit, the creditor asks the court to enter judgment against you. The court enters a default judgment stating that you owe a specific amount of money to the creditor. The judgment is filed with the clerk of court.
At that point, the creditor can request an order granting wage garnishment. If the laws in your state allow wage garnishment for judgment creditors, the court enters a wage garnishment order. The creditor or the court forwards the order to your employer. Your employer must comply with the order.
Some states allow wage garnishes up to 25% of a person’s income. Therefore, you could lose up to a quarter of your income each pay period, depending on the wage garnishment laws for your state.
However, there are some exceptions. Typically, the state can garnish wages for back child support and alimony payments without suing you to obtain a judgment. Likewise, the government does not have to file a lawsuit to garnish your wages for unpaid taxes and other debts owed to the government. It is also not necessary for the government to file a lawsuit to garnish wages for student loan debt.
Federal wage garnishment laws limit the amount a creditor can garnish from a person’s income. Typically, the maximum a creditor can garnish from wages is 25% of disposable income OR THE LESSER of the amount by which the person’s income is more than 30 times the federal minimum wage.
However, state laws could impact the wage garnishment amount. It is important to determine what your state laws say about wage garnishments. Some states do not permit creditors to garnish wages for a judgment. Other states might have lower limits on the wage garnishment amount each pay period.
Use our free Wage Garnishment Calculator below to see the estimated amount garnished per paycheck and explore options to stop the garnishment.
Understanding your legal rights is crucial when dealing with debts and wage garnishment. A wage garnishment attorney explains the laws in your state and how those laws impact your specific situation. An attorney also analyzes your situation to offer legal advice regarding the various options available to you for dealing with wage garnishment orders.
Other ways a wage garnishment attorney can help include:
An attorney determines if you are liable for repaying the debt. Being liable means that you have a legal obligation to repay the debt. The creditor could take action through the court to force you to pay the debt or potentially seize your assets or income to satisfy the debt.
Reasons why someone would not be liable for a debt include but are not limited to:
If you are not legally liable for a debt, you do not have to repay the debt. The creditor cannot seize your assets or take your income to satisfy the debt.
If you do not believe you owe the debt, a lawyer can help you fight the debt collection lawsuit. Winning the lawsuit means that a wage garnishment order is never issued. Seeking legal counsel as quickly as possible is essential because you could only have 20 to 30 days to respond to the lawsuit.
An attorney might be able to work out another payment arrangement with the creditor to avoid wage garnishment. Sometimes, a creditor might be willing to work out an alternative payment schedule if the wage garnishment would force you into bankruptcy. Receiving a smaller payment over a longer period is better than the creditor receiving nothing through bankruptcy.
The lawyer determines the maximum amount for wage garnishments based on state law and your income. If the amount of the wage garnishment exceeds the limits, your attorney files an objection to the wage garnishment amount. Furthermore, if the amount garnished from your wages is overly burdensome, an attorney could petition the court to lower the amount based on mitigating factors and extenuating circumstances.
Filing a Chapter 13 or Chapter 7 bankruptcy case stops wage garnishment. If the garnishment was recent, a creditor might have to return the money to the debtor if the garnishment is within the preference period.
The bankruptcy automatic stay prevents the creditor from garnishing future wages. The creditor must file a motion to modify the automatic stay with the bankruptcy court AND receive an order allowing the garnishment to continue garnishing your wages.
If the underlying debt is dischargeable, filing for bankruptcy gets rid of the debt permanently. Examples of debts discharged through bankruptcy include:
When you complete your bankruptcy case, you receive an Order of Discharge. A bankruptcy discharge eliminates the legal liability to repay a debt. In other words, you never have to pay a discharged debt. Therefore, you do not owe the money, and the creditor cannot garnish your wages or take other actions to recover the debt.
Try our free Chapter 7 calculator to see if you are eligible to file under Chapter 7. You can also use our free Chapter 13 calculator to estimate a bankruptcy plan payment. Explore and compare debt relief options.
Being in debt can be challenging to deal with on your own. We are here to help. Call us at (833) 272-3631 or contact us online for a free evaluation. Let us help you find the best debt relief option for your situation.
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