How to Stop Wage Garnishment
New Jersey Bankruptcy Attorney Explains Your Options
If you fall far enough behind on your payments to a creditor, that person or company, with some exceptions, can file a civil case against you to try to recover the money. If successful, the result can be a money judgement, which your creditor can use to order your employer to withhold a certain amount of money from your paycheck. This money goes straight to the creditor towards paying off the delinquent debt. In some cases, as with IRS tax debt and child support payments, the courts may order money to be withheld right away, without the need for a civil case. Either way, this withholding is called wage garnishment, and it often puts even more stress on an already-strained budget. However, there are some ways that you can stop wage garnishment, including filing for bankruptcy in New Jersey.
There are many reasons that you may be dealing with a wage garnishment. Most commonly a garnishment results when people are struggling with overwhelming debt. These debt problems can be due to unexpected medical expenses or other unforeseen hardships. However, a New Jersey bankruptcy attorney from Garland & Mason, L.L.C may be able to help end the garnishment of your wages through bankruptcy or other bankruptcy alternatives.
Will Bankruptcy Stop Wage Garnishment?
Filing for bankruptcy is often the fastest and most effective way to stop wage garnishment. When you file Chapter 7 bankruptcy or Chapter 13 bankruptcy, an automatic stay takes effect. The stay is a court order requiring your creditors to stop all collection actions immediately. This includes most wage garnishments. The automatic stay remains in effect until your bankruptcy is complete. Chapter 7 bankruptcy typically takes four to six months, while Chapter 13 bankruptcy can last three to five years. During that time, your wages cannot be garnished, though you will have to meet the requirements of the bankruptcy court regarding your debt.
However, there are some debts and garnishments that are exempt from the automatic stay. Most notably, if your wages are being withheld for child support payments or alimony, bankruptcy will not stop the garnishment. Although the automatic stay will end even IRS wage garnishments, you must pay or discharge the underlying debt during bankruptcy. Otherwise, your creditors will be free to reinstate the garnishment once the bankruptcy process ends. This is particularly a problem for tax debt, which cannot always be resolved through bankruptcy.
Can I End Wage Garnishments Without Filing for Bankruptcy?
If bankruptcy is not right for you, there are other ways that you can stop wage garnishment. In some cases, you and your lawyer may be able to negotiate with your creditor to end the garnishment by setting up a repayment plan. However, if you cannot reach an agreement, you can object to the garnishment in court. The grounds for this type of objection can include:
- Your creditor did not follow garnishment procedures. Most creditors must get a money judgement in a civil case before garnishing your wages. Your creditor must inform you both of the civil lawsuit and the resulting wage garnishment, so that you have a chance to defend yourself in court. If you did not receive these notices, you may be able to stop the garnishment.
- You paid the debt. If you already satisfied the debt, perhaps through a lump sum payment, your creditor must stop the garnishment. However, creditors are not always prompt. Therefore, you should object to the garnishment so that your creditor does not get further payments.
- Your creditor is withholding too much money. Both federal law and New Jersey state laws limit the total amount of money that creditors may garnish from your wages. You may use whichever limits allow you to keep more money. If your creditor garnishes more of your money than allowed by law, you can object. These limits are:
- Federal limits: 25 percent of your disposable income or your earnings minus 30 times minimum wage, whichever is less
- New Jersey limits: 10 percent of your disposable income, if you earn less than 2.5 times the poverty level for a household your size, and 25 percent if you earn more than that.
- Special exceptions for child support: The state can garnish up to 50 percent of your income for child support if you have other dependents. If you have no dependents, your garnishment can be 60 percent of your net income. These rates become 55 and 65 percent, respectively, if you are more than 12 weeks behind on payments.
Need to Stop Wage Garnishment? Call a New Jersey Bankruptcy Attorney Today
Whether you are considering bankruptcy or have questions about bankruptcy alternatives to stop wage garnishment, our lawyers can help. The team at Garland & Mason L.L.C. has been helping residents of Monmouth and Middlesex Counties with bankruptcy and debt issues for more than 25 years. We understand how stressful a wage garnishment can be, but we can also explain your options for ending it. Contact us online or call our Manalapan law office to schedule a free consultation with a New Jersey bankruptcy attorney.