If you have been struggling to pay your bills, you may be dealing with creditor threats or wage garnishment. Having your employer take a portion of your paycheck and send it to your creditor is a painful way to repay debts. It also may cause you to fall even further behind on bills like your mortgage or car payment. If a creditor is garnishing your wages, you may be able to stop the process by filing for bankruptcy.
What is Wage Garnishment?
Wage Garnishment is a legal process in which an employer is required to withhold a specific amount of your earnings and send those funds to your creditors. Although wage garnishment helps satisfy debts owed, it can put the debtor in an even more difficult financial situation.
There are different rules in place to determine exactly how much of your pay can be garnished. Creditors cannot seize all of your salary. Under federal law, creditors can only garnish 25% of your disposable income (what is left after mandatory deductions) or the portion of your weekly earnings that exceeds 30 times the federal minimum hourly wage – whichever amount is less. Georgia’s garnishment laws typically follow federal laws.
How Can You Stop Wage Garnishment?
Once a creditor has secured a court order to garnish a paycheck, that creditor can deduct funds until the debt is paid in full. If you are facing financial hardship due to wage garnishment, a bankruptcy attorney can help you file bankruptcy and stop the wage garnishment process.
A Chapter 7 Bankruptcy helps individuals eliminate their outstanding unsecured debts, which include credit card bills, medical bills, personal loans, amounts due on surrendered or repossessed vehicles, and rent from a prior residence. (Child support, alimony, and some student loans generally cannot be eliminated.) A Chapter 13 Bankruptcy involves the repayment of debts in a structured, court-supervised manner. The debtor establishes a repayment plan detailing how much they will pay each month, over a specific period of time.
When you file a Chapter 7 or Chapter 13 bankruptcy, the filing generates an “automatic stay,” which is like a protective shield that goes up around the debtor when the bankruptcy case is filed. An automatic stay is a court order that prevents creditors from taking collections actions against you. The automatic stay provides immediate relief from wage garnishments, as well as overdue payments on unsecured debt, repossessions, foreclosures, and any pending civil litigation against your debt. Typically, the automatic stay remains in place for the duration of your bankruptcy case.
Have Additional Questions? Contact Our Team of Bankruptcy Attorneys
If you have received notification of an upcoming wage garnishment, it is important to take action as soon as possible. The sooner you seek assistance from an experienced bankruptcy attorney, the better off you will be. If you have questions about wage garnishment or the bankruptcy process, please reach out to our team at (678) 323-2394 or via our online contact form. Burrow & Associates accepts all regional filings and has convenient bankruptcy office locations in Athens, Conyers, Duluth, Kennesaw and virtual consultations for 62 counties.
