How to Stop Wage Garnishment

How to stop wage garnishment

Wage garnishment is a procedure in which some of your earnings will be withheld to pay off your debt. Unpaid taxes, child support, back rent or property damage, consumer debts, and student loans are all debts that may trigger the court to garnish your wages. 

However unfortunate, debt is not an unfamiliar situation for many Americans. It happens to the best of us, but It’s never fun when your wages are garnished, especially when you work so hard. So what if you have received a notice from the court that your wages are going to be garnished, can you refute the ruling? Here we’ll discuss how you can stop wage garnishment and/or steps you can take to limit the amount being taken out of your paycheck on a monthly basis. 

How to Stop Wage Garnishment

What most consumers don’t fully understand is that most creditors need a court-ordered seizure of funds before they are able to take any kind of money out of your paycheck. If the creditor, the IRS, or other entity manages to obtain a judgment from the court, it sends documentation to your employer through the local sheriff’s department. Then the process begins of withholding a certain amount of money from each paycheck for that particular debt. 

If you receive a notice of wage garnishment, it’s important that you know your rights. You might be able to protect some or all your wages by filing an exemption claim and stopping the debt collection process in its tracks. In more serious cases, bankruptcy proceedings may be necessary to protect yourself and your family. 

After a creditor or debt collector has obtained a judgment against you, many states require that a “demand letter” be sent out to formally inform you that your wages are going to be garnished. DO NOT ignore this letter or put it aside! Creditors would prefer to receive voluntary, good faith payments from debtors rather than deal with the lengthy debt garnishment proceedings. At the very least you should reply to this letter after seeking immediate legal advice from a professional wage garnishment or a bankruptcy attorney. The best way to avoid being sued is by acknowledging the lawsuit. If you don’t respond, it will only speed up the inevitable and result in a forfeiture of sorts, which is called a default judgment. 

The first step is to act quickly and seek legal advice. John McNamara, debt collection program manager at the Consumer Financial Protection Bureau (CFPB) says,

“It’s a good idea to immediately seek legal advice if your wages are garnished or funds are frozen or removed from your bank account.”

The laws in your state determine how much money you can keep from being garnished. 

Learn these rules ASAP so that when it comes time for repayment, there will be no surprises! There are legal aid offices that will offer low to no-cost legal advice if you are unable to afford a private wage garnishment attorney. But beware, you may have as little as five business days to dispute a wage garnishment claim depending on what state your case is in. 

The right path for you to take when faced with wage garnishment is one that will depend on your financial situation. The process of objecting can become difficult, but it’s not impossible. As long as the proper legal advice has been applied to your case quickly and effectively you should be able to work out an arrangement with the court and creditors, should that apply. Basically, as with most things in life, the more knowledge you have heading into your wage garnishment case, the better. 

So how much of your wages can be garnished? You may be surprised to learn that the garnishment limit is fairly low. While it still takes a chunk out of your paycheck, it may still be manageable and you are able to pay down your debt without further legal action. For example, under federal law, a creditor can’t take more than 25% of your disposable income or 30x your state’s minimum wage. 

How to File a Claim of Exemption

If you believe that your income is being unfairly garnished, it’s important to first file a claim of exemption with the court. This will allow for an opportunity where all parties involved can be heard and decide whether or not they want this order enforced before any action takes place- including collecting debts from their paycheck. 

Objecting because of financial hardship is the most common approach debtors when disputing a wage garnishment case. It is a fairly simple process, but you must be able to prove that the garnishment will prevent you from affording basic human necessities such as shelter and food. Again, this all depends on what kind of debt it is. For instance, tax debt and back child support differ from consumer debt. 

To begin the claim exemption, you’ll need to fill out a simple form with the following information

  • Your legal name
  • The name of the creditor suing you
  • Your case number.

You can find the case number in the preliminary “demand letter” you received alerting you that your wages may be garnished. 

In this form, you will be asked to describe in detail the reasons why you should keep the majority of your wages, if not all, and proof of any dependents such as children or elderly parents you may be responsible for at the time. Once completed, you’ll file the document with the clerk of court in the county your garnishment case originated. Then a hearing will be scheduled for you to dispute your garnishment case. 

You should plan on attending this hearing because the judge expects you to explain why your exemption applies in order for him/her to rule on your case. If the judge rules in your favor, then they have the power to halt future garnishments in this particular case. Alimony cases tend to be a little more complicated and in that instance, you should contact a qualified Los Angeles attorney to help you navigate those waters. 

How to Stop Wage Garnishment by Filing for Bankruptcy

You can stop most wage garnishments by filing for bankruptcy and you don’t need to worry about losing everything you own in the interim. While bankruptcy shouldn’t be considered if the debt itself is fairly low, it should remain an option for significant or longstanding debts.  

Property exemption laws vary from state to state, but in some cases, you can exempt property needed to maintain a modest lifestyle and take care of your family. This includes furniture and clothing as well as cars that would not be considered extravagant or luxurious. 

  • Chapter 7 Bankruptcy – When you file for bankruptcy, a trustee will be appointed to handle the sale and distribution of your nonexempt assets. The goal is that creditors get paid back in full through this process—although it can take many years before all debts are settled!
  • Chapter 13 Bankruptcy In chapter 13 bankruptcy, you can keep your nonexempt property but have to pay the creditors, its value in repayment over 3-5 years. If this obligation is greater than what’s left after servicing debt on non-exempt assets like cars and homes, which must still be paid off if possible before filing for protection, then the repayments will come out of disposable income (or whatever else remains).

Seek Help From a Los Angeles Bankruptcy Lawyer

OakTree Law attorneys can help you negotiate for practical repayment terms with your lender. If they are unwilling to compromise, our Los Angeles wage garnishment lawyers can guide you towards sustainable debt relief. At OakTree Law, our bankruptcy attorneys will assess your unique financial situation and determine whether your gift-giving or charitable donations will affect your bankruptcy proceedings. We fully understand the complexities of debt and most current laws and regulations. Request a free evaluation online or call 888-348-2609 to get started.