Wage Garnishment: What Is It and How Can I Avoid It?

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Nobody intends to fall behind on their bills but it happens, sometimes due to unforeseen circumstances. If you’re unable to make payments, your creditors could take you to court to have your wages garnished in order to receive the money that they are owed.

What is Wage Garnishment?

Wage garnishments happen after your creditor sued you for non-payment. Garnishment is when creditors of your debts have their attorneys file a motion in the courts to have your employer deduct a specific amount of money from your paycheck in order to pay your debt with them. Your creditor must take you to court to have the order approved by the court, unlike garnishments for nonpayment of things like taxes, child support, or student loans. If you don’t make payments for 180 days, your account becomes delinquent and if you continue to not pay, it goes into default. The creditor will try to collect the debt or sell your loan to a collection agency who will attempt to collect it. Wage garnishment is usually a last-ditch effort by the lender or the collection agency your debt was sold to, to collect the money you owe them. They’ve exhausted all other options to get their money.

What Happens if My Wages are Garnished?

If the garnishment is approved by the court, both you and your employer will receive notice of the order of wage garnishment before any money is deducted from your wages. Although the allowable amount of the garnishment varies from state-to-state, typically, the amount of your paycheck that is garnished to pay the debt is around 25% of your disposable income or the amount that your income exceeds 30 times the federal minimum wage, whichever is less. Your disposable income is what’s left after state and federal taxes and other mandatory deductions are taken out of your paycheck. The money that is garnished is taken out of your pay before you receive your check.

Your employer is legally obligated to garnish your wages if the court orders them to and to continue the garnishment until the debt is paid off. They also are required to keep the garnishment confidential and they cannot fire you because of one wage garnishment. However, if there is more than one garnishment from several creditors or from the same one, there are no protections for that.

What Can I Do?

You can protest the wage garnishment decision by petitioning the court for a hearing arguing that garnishment will cause financial hardship. If granted a hearing, you can explain and show evidence that you can’t afford the amount set in the garnishment.

Bankruptcy may the solution for dealing with wage garnishments. Bankruptcy can stop wage garnishments immediately and if you filed for bankruptcy before your wages were garnished, you may be able to get some of your wages back.

Of course, bankruptcy isn’t for every financial situation and it will be detrimental to your credit and although wage garnishment itself will not show up on your credit report, the delinquencies and defaults will. But bankruptcy can be a lifeline if you’re drowning in debt.

At Miller, Hollander & Jeda, we help our clients get a new financial start. Bankruptcy isn’t an ending, it’s the beginning of a better path to financial security. With over 35 years experience helping people get a new start, the attorneys at Miller, Hollander & Jeda of Naples, Florida are dedicated to each and every client, handling all cases with the highest level of professionalism.

If you’re being threatened with wage garnishment, call Miller, Hollander & Jeda today and learn how you can get a fresh start.