Dedicated Bankruptcy Attorneys Serving Fort Lauderdale
When a creditor garnishes your wages, it can limit the income you have to pay other debts. Wage garnishment can quickly snowball into the accumulation of more debt and distress. Filing for bankruptcy may provide the financial relief you need to stop wage garnishment and start managing your debt. The bankruptcy lawyers at Anidjar & Levine offer counseling on how you can stop some creditors from garnishing your wages.
How to Limit or Stop Wage Garnishment
Wage garnishment occurs when a portion of your compensation is withheld by your employer to pay your debts. For a creditor to garnish your wages, it must first sue you for any outstanding debts. If a creditor obtains a judgment against you, then the creditor can ask the court to issue an order for your wages to be garnished. Some types of debts, however, do not require an order from the court. Your wages can be garnished for back child support payments or unpaid taxes, for example, without the need for a court judgment.
There are limits on how much a creditor can garnish your wages. Federal law restricts the amount to the lesser of 25 percent of your disposable earnings or the amount that your wages exceed 30 times the minimum wage. The limit applies even if more than one creditor has an order to garnish your wages. Certain types of income are also exempt from garnishment, such as workers’ compensation and social security benefits.
There are exceptions to these limits. A greater amount of your wages may be garnished for child support and tax payments. For example, up to 60 percent of your wages may be garnished for child support if you are not currently supporting a spouse or child. You can stop some, but not all, of your wage garnishment by filing for bankruptcy. Filing for Chapter 7 or Chapter 13 bankruptcy places an “automatic stay,” or stop, on many creditors’ attempts to collect on a debt, including wage garnishment.
When you file for bankruptcy, you will provide the court with a list of your creditors. These creditors will then receive notice of your bankruptcy filing. They are no longer able to start or continue to garnish your wages, foreclose on your home, repossess your vehicle, or make other collection attempts without a removal of the automatic stay. Once you file, you can immediately stop garnishments by notifying your employer and sending the creditor a notice of your bankruptcy.
It may be possible to recover some of the wages that were garnished before you filed for bankruptcy. You can file a complaint with the court to recover any wages that were garnished 90 days before you filed if they total more than $600 and you have enough Florida bankruptcy exemptions.
Lifting an Automatic Stay
When you file for bankruptcy, the automatic stay stops your wages from being garnished. A court will not lift the stay unless a creditor can show a good reason for removing it, such as missed adequate protection payments to avoid vehicle repossession.
Generally, the automatic stay will be removed if you receive a bankruptcy discharge or if your case is dismissed without a discharge. If your wages were garnished to pay a debt, and you receive a discharge for this debt, the creditor cannot garnish your wages after the bankruptcy discharge because you are no longer under any obligation to pay the remaining debt. If you do not receive a bankruptcy discharge, however, a court will lift the automatic stay, and the creditor can resume garnishing your wages.
Counseling from Knowledgeable Hollywood Bankruptcy Lawyers
At Anidjar & Levine, our bankruptcy attorneys provide seasoned legal counseling on matters related to bankruptcy, including wage garnishment. We can discuss how filing for bankruptcy can put a stop to wage garnishment by certain creditors. Our compassionate and capable attorneys can assess your financial situation and advise you on whether filing for bankruptcy can help you make a fresh start. We serve clients throughout Miami and South Florida. For a free consultation, call us today at 800-747-3733 or fill out our contact form.