If you’re dealing with debt, chances are your wages are being garnished to pay off a portion of what you owe. Wage garnishments can be overwhelming, especially when going through financial hardship. Read on to learn how to stop wage garnishments through the debt relief options available to you.
What is a wage garnishment?
Wage garnishment is a debt collection tool that allows collection agencies to withhold a certain amount from your payroll as repayment. If a lender gets a judgment against you, they can get a writ of garnishment and send it to your employer to garnish your wages.
The deducted amount for wages garnished is limited to either of the following, depending on which is less:
- A deduction up to 25% of your disposable income; or
- Deducting the amount by which your income exceeds 30 times the federal minimum wage.
If you want to stop a court order to garnish wages, it’s important to act fast and seek legal counsel to determine your next steps. Below are four options to consider in stopping a wage garnishment.
1. Avoiding a default judgement.
Before a debt collector can get an order for garnishment, they first need to get a judgment after suing the debtor. Even if you don’t have any intention of fighting the lawsuit, ignoring it isn’t the answer either. If you ignore the lawsuit, a collection agency can ask the court to grant a default judgment against you.
Instead, make sure to answer the lawsuit after being sued. You’ll need to file a document in response to the lawsuit and pay the appropriate filing fees. By doing so, you’ll be able to buy some time to negotiate with your creditor or seek other debt-relief options.
2. Negotiating with your creditor.
If you’re unable to pay the amount owed in a lump sum payment, you may be able to discuss a payment plan with your debt collectors. Debt settlement or bankruptcy lawyers can negotiate with creditors on your behalf.
However, note that your creditor probably won’t agree to the repayment plan if your monthly income and living expenses don’t allow you to pay as much as the garnishment order requires.
3. Filing a claim of exemption.
Once a judgment is entered and a wage garnishment is ordered, the next thing you can do is to challenge the order in court. To do so, you need to file a claim of exemption within a certain period after receiving a copy of the garnishment order. Check your state law or consult with a local bankruptcy attorney to find out how long you have for filing a claim.
4. Declaring bankruptcy.
The options mentioned to stop wage garnishment can only provide temporary relief. If you’re struggling with overwhelming debt and have multiple creditors filing lawsuits against you, it may be time for a fresh financial start. Speak with a bankruptcy lawyer for information on how to file bankruptcy and which type of personal bankruptcy to file for.
Filing for bankruptcy can provide you with:
- Temporary relief while undergoing the bankruptcy proceedings;
- Bankruptcy protection for an exempt property; and
- Permanent debt relief upon receiving your bankruptcy discharge.
The automatic stay, which takes effect after you file your bankruptcy petition to the bankruptcy court, will temporarily halt the garnishment of wages. The stay will also prevent a debt collector from making collection calls and efforts while your bankruptcy case is underway.
Moreover, you’ll be able to end garnishment completely after your unsecured debts are wiped out at the end of the bankruptcy process. This includes consumer debt such as credit card debt, car loans, and medical bills. However, not that a bankruptcy filing won’t be able to discharge or stop garnishing wages for alimony and spousal support, child support, student loans, and tax debt or back taxes.
Hire a Bankruptcy Attorney!
Are you considering filing bankruptcy in Washington or Oregon? Our bankruptcy attorneys at Northwest Debt Relief Law Firm can assess your financial situation and put you back on the road to financial success. Call us today and avail of our zero down plan for filing Chapter 7 bankruptcy!