Wage garnishment occurs when a portion of a person’s earnings are directly withheld by an employer to pay a debt. Wage garnishment is typically ordered by a court. Your employer must comply with the court order regarding how much to withhold from your paycheck.
It’s important to know that “earnings” is any compensation paid for wages, salary, commission, bonus, or otherwise. It also includes periodic payments pursuant to a pension or retirement program. Thus, any amount of money that you get from your job, even if you are self-employed, is open to wage garnishment.
Yes, your employer can only garnish a certain amount of your “disposable earnings.” Disposable earnings are the part of your income that is remaining after certain deductions that are required by law, including housing expenses.
Your wage garnishment cannot exceed 25% of your disposable earnings in any one week. However, if your disposable income exceeds 30 times the Federal minimum hourly wage, then the court may require an additional amount to be withheld.
No, your employer cannot fire you if your wages are garnished. The process of wage garnishment can be embarrassing since your employer will know personal information about your finances. However, you should not worry about being fired. Title III of the Consumer Credit Protection Act (CCPA) prohibits employers from discharging you for wage garnishment.
Wage garnishment occurs when you owe a debt, and they go through the legal process to have your income withheld to pay that debt.
If you owe student loans, unpaid taxes, past due child support, or other debts, the government or a creditor can garnish your wages. In many cases, these creditors must go through the legal process and get a court order to hold your wages to repay them. However, there are certain types of debt, including federal student loans, that do not require a court judgment.
Some of the most common types of debt that lead to wage garnishment include the following:
When any creditor gets a court judgment against you, they can then request wage garnishment from the judge.
You have multiple options if you want wage garnishment to stop. Some of the methods you can use include:
Bankruptcy is a common option for people who have significant wage garnishments. When you file bankruptcy, the court will issue an “automatic stay,” which will stop all wage garnishments immediately. Then, you will have an opportunity to include that debt in your bankruptcy.
If you file Chapter 7 bankruptcy, the debt you owe might be eligible for discharge. That means you won’t have to repay it at all. However, student loans, some unpaid taxes, past due child support, and some other types of debt cannot be discharged. Those payments will be paused in Chapter 7, but not eliminated. Your garnishment lawyer can help you figure out if Chapter 7 is your best option.
If you file Chapter 13 bankruptcy, your debt can be included in your payment plan. This will stop wage garnishment and give you additional time to repay the creditor. At the end of your three- to five-year repayment plan, your remaining debt may be discharged, if it qualifies. Again, student loans, some tax debt, and other types of debt cannot be discharged.
Yes, if you can pay the full amount that you owe or establish a new payment plan, then you can stop wage garnishment. The creditor is likely to be open to renegotiating a new agreement because they will want to avoid you filing for bankruptcy.
A wage garnishment law firm can help you renegotiate an acceptable payment situation with the creditor. It’s best to work with a lawyer because the creditor may be more likely to listen to a legal professional. These companies often try to take advantage of debtors.
A wage garnishment attorney near you can help you make an embarrassing income withholding situation go away. It’s important to work with an attorney who understands wage garnishment law and can use that information to benefit your case.
Your attorney can help you determine which method of stopping wage garnishment is the best option for you. If you are financially able to pay a lump sum amount, your lawyer may be able to get the creditor to settle for less than is actually owed. Your lawyer can also negotiate a payment plan that is affordable for you.
If you decide to file for bankruptcy, then your bankruptcy lawyer can help you decide if Chapter 7 or Chapter 13 is right for you.
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