How Bankruptcy Can Stop Wage Garnishment
Filing for bankruptcy has many benefits for individuals and businesses struggling with debt. For consumers who are facing significant amounts of debt and collection actions, bankruptcy can also stop the stress of facing action from creditors and debt collectors. This benefit comes from the automatic stay, an injunction that halts debt collection action once a debtor files a bankruptcy petition. While the automatic stay can stop many forms of debt collection action, one of those is wage garnishment. It is important for debtors to understand how bankruptcy can stop wage garnishment, and our West Palm Beach bankruptcy attorneys are here to provide you with the information you need.
What is Wage Garnishment?
The term wage garnishment is sometimes known as wage attachment, or you might hear this process described as having your wages garnished or your wages attached. In short, wage garnishment is a legal tool that creditors can use in order to require your employer to withhold a certain amount of money from your paycheck in repayment for a debt you owe. To be clear, a creditor cannot simply initiate a wage garnishment on their own. Rather, a creditor must go through the court. What this means is that a creditor generally must file a lawsuit against you, receive a judgment in their favor, and the court must order wage garnishment in order for it to be lawful (sometimes government agencies can also order wage garnishment, such as for family support debt).
In general, wage garnishments can take 25 percent of a person’s disposable income. If your disposable income is under 30 times the amount of the federal minimum wage, then your wages cannot be garnished.
How Bankruptcy Can Halt Wage Garnishment
As soon as a debtor files for bankruptcy, the automatic stay stops any to collect debts, including wage garnishment. The automatic stay is an injunction, and it prevents creditors and debt collectors from taking any new actions against you to collect on debts, as well as from continuing any existing actions against you to collect on debts. What this means is that the automatic stay will prevent a creditor from taking any of the following steps:
- Filing a lawsuit against you with an aim of garnishing your wages;
- Continuing with an ongoing lawsuit against you with an intention of seeking wage garnishment; and
- Continuing to receive money from your paycheck due to an existing wage garnishment order.
Contact Our West Palm Beach Bankruptcy Lawyers
The automatic stay is an extremely powerful tool in a bankruptcy case, and it can stop wage garnishment from being initialized or continuing. If you are struggling with wage garnishment and debt, or if you want to know more about your options for bankruptcy, you should get in touch with one of the experienced West Palm Beach bankruptcy lawyers at Kelley Kaplan & Eller as soon as you can to discuss your case. We can provide you with more information about bankruptcy and wage garnishment in general, and we can assist you with a bankruptcy filing that can stop wage garnishment from continuing.
Sources:
leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=0200-0299/0222/Sections/0222.11.html
law.cornell.edu/uscode/text/11/362
