Stop Wage Garnishment
Bankruptcy Was Designed to Stop Wage Garnishment
If you get deep enough in debt, your creditors may get court orders to garnish your wages. In other words, they can take money right out of your paycheck to pay your debts.
In some cases, wage garnishments may take more than half of your paycheck.
But you don’t have to sit there and watch your money float away. Filing bankruptcy is designed to stop creditor harassment, including wage garnishment, and settle your debts.
To learn more about how bankruptcy may stop wage garnishment, fill out this form to connect with a local bankruptcy lawyer:
Wage Garnishment Laws
If you are falling behind in your debts, it is possible that a creditor could obtain a court order to garnish your wages.
Wage garnishment is a serious and drastic step, often used by creditors that have no claim to property. For example, if you are behind on a home mortgage, the bank may simply try to foreclose on your home and take it back.
But without property to back up your credit card purchases or medical bills, a creditor may file a motion in court asking for your wages to be garnished.
Depending on your debt, the court will assign a percentage of your paycheck to be automatically deducted and sent to the creditor.
Each state has a limit on how much money can garnished, but often up to 25 percent of your disposable income could be taken. In cases of tax debt, much more could be taken out.
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It’s possible that your debts could cause a spouse’s wages to be garnished. In some states, debt and assets are shared by a married couple. In these cases, your spouse’s wages might be at stake even if the credit card and the debt are in your name.
Your employer is required by law to comply with the court order, and will be unable to stop wage garnishment. However, you are also protected by the same law, which says that an employer may not fire you because your wages are being garnished.
Wage garnishment may not follow you from job to job. Each garnishment is a separate court order and must name a specific employer. However, any severance pay or bonus pay you receive may also be subject to garnishment.
Wages are often also garnished for unpaid state and federal taxes and delinquent child and spouse support.
How Bankruptcy May Stop Wage Garnishment
Wage garnishment will only stop if:
- Your debts are settled
- Bankruptcy’s automatic stay stops the action
When you file bankruptcy you should receive the protection from the automatic stay. This is a powerful court order that puts a quick stop to all forms of collection for the duration of your case.
Wage garnishment, along with phone calls, letters, foreclosure and repossession, is considered a type of collection.
Both Chapter 13 and Chapter 7 bankruptcy may stop wage garnishment.
In the case of a Chapter 13 bankruptcy, the garnishment will stop for several years as you work through your repayment plan. In a Chapter 7, each state’s exemptions provide protections against wage garnishment.