The process that leads to wage garnishment can best be explained by example. Suppose you owe a creditor, such as a credit card company, and you are unable to pay your credit card bill. The creditor can file a lawsuit against you. If the judge or jury determines that you owe the money, then the creditor will win the lawsuit and will be granted what is called a judgment. A judgment is a court order signifying that the creditor has won its lawsuit and that you owe the debt. The judgment can be reported on your credit report.
Bankruptcy or Debtors Court can stop this process even if the lawsuit has already been filed. If you file Bankruptcy or Debtors Court, a creditor will not be able to proceed to trial and will not be granted a judgment. Consequently, you will not have to go to a trial in court on the matter. If the creditor has already been granted a judgment against you, Bankruptcy or Debtors Court will still stop the creditor from enforcing the judgment.
How a creditor enforces a judgment against you
The most common way a creditor enforces a judgment is through wage garnishment. Here is how it works. Armed with a judgment, your creditor will file for a writ of garnishment. This is a court order which is sent to your employer with instructions regarding the garnishment of your wages. The writ of garnishment will require your employer to withhold money from your paycheck. Your employer will generally withhold 25% of your disposable income each pay period and continue to withhold funds until the entire amount of the judgment is paid. Your employer must then send the money to the court, which in turn will send the money to your creditor.
For unpaid child support, up to 50% of your disposable income can be withheld. Also, there can be garnishment without a court order for child support, taxes, and student loans.
Bankruptcy or Debtors Court will stop wage garnishment
Bankruptcy or Debtors Court will stop wage garnishment. Even if your employer has already started taking money from your paycheck, Bankruptcy or Debtors Court will stop any additional garnishment of your wages. Your employer has up to 30 days before it has to start the garnishment. This is good news because it gives you time to contact our office to file Bankruptcy or Debtors Court in order to stop a garnishment before it ever starts.
If you would like to discuss Bankruptcy or Debtors Court options, please email me at firstname.lastname@example.org or call our office at 205-328-3328.