Wage garnishment can be increasingly stressful when you are figuring out ways to pay back your debts. When creditors take out percentages of your income to pay back what you owe, it can leave you feeling overwhelmed. In some cases it may even affect your standard of living.
Bankruptcy may offer a solution if you are behind on payments and if your wages are being garnished. There are a few options that may help relieve or stop wage garnishments on some of your debts that are owed to creditors.
John Dunlap is an experienced attorney that works with clients to file bankruptcy and stop wage garnishment. Having an attorney to assist you with your case may help lighten the burden of wage garnishments. Contact us for a free 30 minute session today.
What is a wage garnishment?
Wage garnishment happens when a court requires your employer to withhold a portion of your paycheck and send it directly to creditors you owe money. There are different requirements and expectations for various types of debt that impact how much and how often they take money from your paycheck. However, there are usually legal limitations to how much money can be taken out of your paycheck for garnishment.
Can filing bankruptcy stop wage garnishments?
Filing for bankruptcy may help or even stop creditors from garnishing your wages. In both Chapter 7 and Chapter 13 bankruptcy, wage garnishments are usually stopped immediately when the automatic stay is granted.
There are exceptions to automatic stays and certain kinds of garnishments aren’t stopped by bankruptcy, including:
- Child support wage garnishments
- IRS wage garnishments
- Student loan wage garnishments
Your individual bankruptcy filing and personal finances determine what wage garnishments will be stopped by filing bankruptcy. However, most wage garnishments for credit card debt, mortgages, car loans and other consumer debt are stopped during an automatic stay.
John Dunlap can help prevent wage garnishments by creditors by helping you make a bankruptcy plan. Call today to see how we can help with your case and stop creditors from garnishing your wages.
How do creditors garnish wages?
Creditors may file a lawsuit to try and get your wages garnished if you owe child support, alimony, student loans, are behind on credit cards, or defaulted on a loan. Creditors must have a court order before your wages may be garnished to pay back creditors.
Creditors must file a lawsuit and win their case before wage garnishment can be put into place. After winning the lawsuit, creditors will send notice to your employer to let them know what percentage of your wages will be garnished.
Additionally, the legal limit for wage garnishments is typically 25% of your wages. This means that creditors cannot take more than 25% from your income, regardless of what you owe but the percentage may vary state to state. However, depending on what you owe, multiple creditors may be able to garnish your wages at the same time.
Wage garnishment in Chapter 7
Chapter 7 bankruptcy has the ability to stop some wage garnishments. In Chapter 7, wage garnishments may be stopped through an automatic stay. If your wages were being garnished before bankruptcy, creditors will usually be notified of your bankruptcy status and must stop wage garnishments on some or all of your debts.
Some wage garnishments, including child support, will not be stopped by the automatic stay because they are considered a priority debt. Child support is viewed as more important than other debts and must be continuously paid, even during the bankruptcy process.
Wage garnishment in Chapter 13
Wage garnishments in Chapter 13 are similar to Chapter 7. Once bankruptcy is filed, Chapter 13’s automatic stay goes into effect immediately. Creditors will be notified and halt the garnishment during your bankruptcy period.
Priority debts like child support are handled differently in Chapter 13. Child support debts are not wiped away or stopped completely but they may be paid back over the Chapter 13 bankruptcy period. If your child support is a part of the Chapter 13 repayment plan, it may not be garnished from your wages. Paying back child support relieves the burden of wage garnishments and allows you more time to pay back child support in smaller amounts.
We May Be Able To Help Stop Wage Garnishments
Wage garnishments can become an added stress to you and your family. The automatic stay within both Chapter 7 and Chapter 13 offers a potential solution to your wage garnishments and may relieve some stress on you and your loved ones. Talking to an experienced attorney may help to determine how your wage garnishments will be dealt with depending on your case.
Don’t let wage garnishment overwhelm you. Attorney John Dunlap may be able to help you stop wage garnishment and restart your financial life. Call today for a free 30 minute session.