Rules for Wage Garnishment - Who Can Take Your Paycheck?!
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Rules for Wage Garnishment

Wage garnishment can be devastating: When you are already stretched thin creditors swoop in and start taking part of your paycheck directly.

But, in order for creditors to garnish your wages they must take several legal steps, which include filing a lawsuit and obtaining a court order. The court order allows your creditor to take money directly from your paycheck or bank account.

While courts typically view wage garnishment as a last resort for debt collection, it does often occur. Fortunately, filing for personal bankruptcy is designed to put an instant end to wage garnishment during your case and clear your debts.

To learn more about the rules for wage garnishment, and how bankruptcy may help you keep your income, speak with a local bankruptcy lawyer during a free case evaluation. Simply complete the form on this page and we'll connect you right away.

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How Someone Can Take Money From Your Paycheck

If you have fallen behind on payments for a particular loan, your creditor may seek to garnish your wages. The creditor may take money directly from your paychecks or remove it from your bank account.

Wage garnishment is typically a last resort for a creditor and usually occurs when the creditor has no claim on the debtors’ property.This means that debt related to things like credit cards, medical bills and personal loans are often causes of wage garnishment.

The amount of money that the creditor is allowed to garnish depends on the amount of money you owe and the garnishment limits set forth by your state’s laws. A bankruptcy lawyer may go over the rules in your state, which may be quite aggressive.

Other rules of wage garnishment include:

  • Most states have limits on the percentage of wages that can be taken
  • Up to 25 percent of your disposable income may be garnished
  • An employer may not fire you simply because your wages are being garnished
  • Your spouse’s wages may also be garnished to pay off your debts

In addition, wage garnishment may not follow you from job to job. If you switch employment positions, your creditor must obtain a new court order in order to continue garnishing your income.

Since it is such an invasive tactic, wage garnishment can be an extremely disruptive force in an individual’s life, especially if the person has other debts. Fortunately, personal bankruptcy was designed to stop wage garnishment.

Bankruptcy is Designed to Stop Garnishment of Your Paycheck

Both Chapter 7 bankruptcy and Chapter 13 bankruptcy may stop your creditors from garnishing your wages.

When you file for either form of bankruptcy, you usually receive the immediate protection of an automatic stay. This prevents your creditors from taking any collection actions against you during your bankruptcy case. Types of creditor actions that may be stopped include:

  • Wage garnishment
  • Phone calls
  • Letters
  • Foreclosure 
  • Repossession

In Chapter 13 bankruptcy, the automatic stay may last for several years as you make payments on your reorganized debt payment plan.

During Chapter 7 bankruptcy, state bankruptcy laws provide further protection against wage garnishment. These laws, however, vary widely by state. A local lawyer may be able to provide further information about your state’s rules for wage garnishment.

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