Garnishing a debtor’s wages is one of the most common and effective means a creditor has to get paid. A garnishment is a typically a court order (in some rare cases a garnishment can come from another source), and directs the debtor’s employer to withhold a certain amount or percentage from the employee’s pay. This amount may be limited by state or federal laws, depending on the type of debt and the income source, and the debtor may be able to assert certain “exemptions” that restricts the amount of the garnishment each pay period. The garnishment usually comes unannounced and is delivered just before the debtor’s payday, to ensure that the creditor receives the maximum amount from the garnishment.
Certain income sources receive increased protection from garnishment like Social Security, retirement plan benefits, public assistance, workers’ compensation, and unemployment or disability benefits. However, certain debts like child support can collect from most of these income sources.
When a garnishment is taking more than you can afford to pay, it may be time to consider filing bankruptcy. The federal bankruptcy laws will stop debt collection including garnishments. The moment the bankruptcy case is filed a temporary injunction known as the “automatic stay” stops all creditor actions immediately and automatically – even if the creditor has no knowledge of the bankruptcy filing! This stay continues throughout your bankruptcy case unless terminated or modified by the bankruptcy court. For most garnishments, the debt will be discharged at the end of the bankruptcy case and the creditor can no longer collect from you.
Once you have filed your bankruptcy and the garnishment has stopped, it may be possible to have wages that were withheld from your check returned to you, provided your employer has not already sent the funds on to the court or to the creditor. Ask your attorney whether you can have funds returned once you file your case.
If you have a wage garnishment, consider your options by consulting with an experienced bankruptcy attorney. Your attorney can explain how the federal bankruptcy laws can stop your wage garnishment and put your wages back into your pocket. For a free consultation, contact Haines and Krieger at 1-800-ATTORNEYS.