We’ve written a series of blog posts answering common questions regarding wage garnishment and bankruptcy and how it impacts your finances. Call (262) 827-0375

Stopping Wage Garnishment

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If you fail to make debt payments, your creditor may take legal action by suing you and seeking a court judgment. Once this occurs, the creditor can ask the court to garnish your bank account or wages to reimburse the debt.

However, a wage garnishment can worsen an already difficult situation if you’re already struggling to meet your financial obligations. The good news is that there are measures you can take to prevent garnishment from causing havoc in your financial circumstances.

What is Wage Garnishment?

Debt collectors may resort to garnishment if you’re unable to repay a debt. Upon court approval, the creditor can ask for a portion of your wages or bank account funds to settle the debt. These enforced payments can worsen your financial difficulties and make it challenging to meet essential expenses.

Therefore, it’s crucial to engage with your creditor before they initiate a lawsuit to prevent the garnishment. If you’ve already reached that point, however, there are potential alternatives you can explore to eliminate the garnishment.

Understanding Garnishment Process

Wage garnishment regulations differ across states, allowing a limited timeframe for you to raise objections. The duration varies based on your state and the debt’s nature, with the window sometimes as brief as five days.

Nevertheless, the Federal Debt Collection Practices Act (FDCPA) safeguards all consumers. This legislation prevents unfair practices by third-party debt collectors in their debt collection efforts. It shields you against harassment, unsolicited calls during odd hours, and disclosing your debt to anybody other than your spouse.

How Wage Garnishment Works

As said earlier, creditors resort to garnishment as a final measure to recover their owed funds. Before this, they usually explore alternative options such as negotiations, engaging collection agencies, or structured loan repayment plans. If these attempts prove unsuccessful, the creditor may seek court approval to proceed with garnishment.

After the creditor initiates the garnishment request, the court must approve it and forward it to your employer for implementation and compliance. Subsequently, your employer must subtract the specified amount from your paycheck and send it to the creditor. Failure to comply with a garnishment order can hold your employer liable for the debt’s repayment.

It is worth noting that once the garnishment process commences, it will persist until the debt is wholly settled or until legal measures are undertaken to stop it.

5 Ways for Stopping Wage Garnishment

When faced with a garnishment order, taking immediate action is crucial. Assessing potential legal or financial alternatives to halt the garnishment process is valuable. Here is how you can stop the garnishment:

Reimburse the Debt Fully

Paying off the debt is a widely used approach to end garnishment. By doing so, you can instantly halt the garnishment and find reassurance that your employer will no longer deduct your paycheck. However, before pursuing this option, knowing the repayment terms and assessing any potential financial consequences is advisable.

Thus, look closely at your expenses to determine if you can afford to make a single payment to settle the debt. Paying off the debt may be the optimal resolution to cease garnishment.
Challenge the Judgment in a Court

Suppose the garnishment is the result of a judgment. In that case, it might be possible to dispute that judgment in a court. Depending on the available evidence and the circumstances, engaging a garnishment attorney could assist you in this matter. Challenging the judgment can be intricate and time-consuming, but it could be your most viable option if you possess a valid legal argument.

A court hearing will be essential to present your case. If your challenge is successful, the court may modify or completely overturn the judgment. In such a scenario, it can potentially cease the garnishment process. However, it is vital to remember that you must establish your case’s merit per the laws of your state of residence.

File for Bankruptcy

Although filing for bankruptcy carries a social stigma, it can be a powerful strategy for halting garnishment and reclaiming financial control. Once you initiate bankruptcy proceedings, the court will issue an order that immediately stops all garnishments and other debt collection activities. The personal bankruptcy that you can apply for includes:

Chapter 7 Fresh Start: Chapter 7 bankruptcy offers a straightforward approach to eliminate debts swiftly and provide complete relief. This plan eliminates unsecured debts, such as credit card bills, medical expenses, judgments, personal loans, garnishments, and other similar obligations.

Chapter 13 Reorganization Plan: Chapter 13 bankruptcy aims to halt creditor actions and establish manageable repayment terms to help you regain financial stability. Here is where working with a garnishment lawyer comes into play, as they will help you develop a balanced budget based on your unique income and debt obligations.

Agree on a Good Payment Plan

If your present financial circumstances make it challenging to repay the debt completely, negotiating a more feasible reimbursement plan with your creditor is possible. This negotiation process may involve discussions regarding decreased monthly payments, reduced interest rates, extended loan terms, or even a lump-sum settlement. Successful negotiation can halt the garnishment and lessen the debt burden.

Having a well-defined plan can prevent further collections or legal actions while decreasing the overall interest you need to pay. It’s important to remember that creditors may be open to working with you if they perceive it as beneficial to them, so don’t hesitate to engage in negotiations.

File an Exemption Claim

If you believe that a portion of your wages should be protected against garnishment, it is crucial to submit an exemption claim. This claim allows you to assert your eligibility for exemption based on specific factors, such as being the head of a household, having dependents, or maintaining a low income. Moreover, if another creditor is currently garnishing your wages, you can file a claim to limit the amount deducted.

Is Hiring a Wage Garnishment Attorney Worth It?

Hiring a wage garnishment attorney can be a wise decision when facing the possibility of wage garnishment. With their expertise in this area of law, attorneys can provide valuable guidance, protect your rights, and navigate the legal procedures involved. They can alleviate stress, advocate, and help you explore options to challenge or negotiate the garnishment.

WAGE GARNISHMENT AND HOW TO STOP IT

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So one day you get called into your employer’s office and are told that, starting with your next paycheck, the amount of that check will smaller than what you are accustomed to receiving. He or she explains that your wages are being “garnished,” meaning that your employer has to withhold a certain amount and pay it to one of your creditors.

What now?

First of all, a creditor just can’t garnish your wages without going through the courts and getting a money judgement. Let’s say you’re way behind on your credit card payments. Perhaps you’ve missed a car payment or two. The creditor can sue you to get a court judgement to have your wages garnished.

However, this is not true in all cases. For example, if you owe back taxes, owe child support or are behind with a student loan these creditors don’t have to bother with the courts. They have a statutory right to take money directly out of your paycheck.

How much can they garnish? The good news is that the creditor cannot confiscate your entire paycheck. For instance, federal law dictates limits on how much money can be garnished, namely 25 percent of your disposable earnings (the amount remaining after mandatory deductions) or the amount by which your disposable earnings for that week exceed 30 times the federal minimum hourly wage, whichever is less. Here in Wisconsin there are stricter limits than provided by federal law, limiting garnishment in most cases to 20 percent or the amount by which your disposable earnings exceed 30 times the federal minimum wage (Wis. Stat. Ann. § 812.34, Wis. Stat. Ann. § 815.18(3)(h).) (“Disposable earnings” means that part of the debtor’s earnings remaining after deducting Social Security taxes and federal and state income taxes listed on the person’s wage statement. (Wis. Stat. Ann. § 812.30(6).).

Let’s say that the resulting amount causes your income to fall below the poverty line. In that case the garnishment is limited to only the amount above the poverty line. (Wis. Stat. Ann. § 812.34.) You can also petition a court for relief if the exemption is insufficient to acquire the necessities of life for you and your dependents. (Wis. Stat. Ann. § 812.38.)

There are also a number of instances where your creditor simply cannot garnish your wages. These include:

– Your household income is below the poverty line. (Wis. Stat. Ann. § 812.34.)
– You receive need-based public assistance (such as supplemental security income, food stamps, or veterans benefits based on needs), have received such assistance within six months before service of the earnings garnishment forms to the garnishee, or have been determined eligible to receive need-based assistance although actual receipt of benefits hasn’t started. (Wis. Stat. Ann. § 812.34.)
– At least 25% of your disposable earnings are assigned by court order for support. (Wis. Stat. Ann. § 812.39(2), Wis. Stat. Ann. § 812.44.)

There are also limits to wage garnishment with respect to child support, student loans and unpaid taxes. However, all court orders for child support include an automatic income withholding order. This means that if you are lagging in your support payments the other parent can get a wage garnishment order from the court. Federal law limits this type of wage garnishment. Your disposable earnings can be garnished by up to 50 percent to pay child support if you’re currently supporting a spouse or a child who isn’t the subject of the order. If you’re not supporting a spouse or a child, up to 60 percent of your earnings can be taken. An additional 5 percent may be taken if you are more than 12 weeks behind in your support payments. (15 U.S.C. § 1673.) Wisconsin follows federal limits. (Wis. Stat. Ann. § 767.75(2r).)

The creditor will continue garnishing your wages until the debt is paid off but there are ways you stop the garnishment. These include:

– Take the matter to court and claim an exemption with the court. Depending on your particular situation and Wisconsin’s exemption laws which determine the amount of income you’ll be able to keep, you might be able to keep most or all of your money.
Should you receive a notice of a wage garnishment order, you may be able to protect or “exempt” some or all of your wages by filing an exemption claim with the court or by raising an objection. This will depend on the type of debt that the creditor is trying to collect as well as state law.
– File for bankruptcy. Wisconsin’s exemption laws determine the amount of income you will be allowed to keep.

For more information about wage garnishment and how we can help you protect yourself, call attorney Michael Burr and the experts at the Burr Law office at (262) 827-0375.

How to Stop Wage Garnishment Immediately in Milwaukee

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What might your debt problems mean for your future? For most people, owing money is nothing new, but things can get far worse than simply having to deal with annoying creditors. You might soon discover that wage garnishment makes it harder than ever to get back to a healthy financial state.

Want to learn how to stop wage garnishment immediately? Here’s what to know about dealing with the system the right way.

Wage Garnishment Explained

Wage garnishment is when a court awards a creditor the right to take money directly from your paycheck. For instance, if you fall behind on your home loan, the bank might seek a garnishment order — Instead of paying you your full paycheck amount, your employer will have to withhold more than normal to resolve your debt.

Wage Garnishment Rules

Wage garnishment can be a tricky topic. Although there are limitations to when creditors can pursue orders, most are willing to jump the hurdles if it means they’re more likely to get their money. Some creditors, such as government entities, education lenders and child support recipients, don’t even have to get court judgments to garnish your income.

Wisconsin maintains some extra protections for debtors who find themselves in certain situations. For instance, if you took out a payday loan, then the lender can’t garnish your wages to get the money back. State law also includes exemptions for individuals and families who fall below predetermined poverty limits, and judges may make further allowances for debtors who can prove they have special circumstances or hardships.

How to Stop Wage Garnishment Immediately

What about the majority of Milwaukee debtors who don’t qualify for wage garnishment relief or exemptions? In the legal community, filing for bankruptcy is often viewed as the most viable solution.

Contrary to popular belief, bankruptcy doesn’t simply mean that you’re out of money. Instead, it’s a form of temporary legal status that carries unique rights designed to prevent people who can’t pay their debts from facing dire circumstances. One of these benefits is the right to an automatic stay.

An automatic stay is a court-ordered halt, or injunction, on debt collection actions. Most creditors can’t pursue garnishments while an injunction is in effect, and a hold lasts until your bankruptcy case gets resolved. In other words, you’ll have extra time to formulate and enact a plan.

Not all automatic stays are equivalent. For instance, Chapter 7 injunctions don’t affect wage garnishments related to child support or alimony. Although you can gain temporary relief from these obligations by filing for Chapter 13 bankruptcy, you’ll still have to come up with an agreeable plan for repaying those debts over the next 3 to 5 years.

Is Bankruptcy the Answer to Your Wage Garnishment Issues?

Filing for bankruptcy may be your best option when you want to stop a wage garnishment order immediately and recover from debt. It’s essential, however, to leverage this powerful tool correctly.

Talk to an experienced, reputable lawyer to ensure you make the right choices for a debt-free future. Get in touch to learn why so many families in Milwaukee, Waukesha, and the rest of Wisconsin entrust their financial well-being to Burr Law Office. Call (262) 827-0375 today.

Bankruptcy Consequences: Skipping Payments

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Many people avoid filing despite increasing debt because they are afraid of how the process will affect their credit score and ability to rebuild their finances. However, not filing for bankruptcy with a lawyer when you no longer have the ability to pay your debts can have dire bankruptcy consequences.

Wage Garnishment

One of the first steps your creditors will take when you neglect to pay your debts is to garnish your wages. The maximum amount that can be garnished from you paycheck is usually 25 percent of your disposable income if it is greater than 290 dollars, or any amount greater than 30 times the federal minimum wage. While tips are generally not garnished, your wages, salaries, commissions, bonuses, and pensions can all be garnished until your debt is paid.

Liens and Levies

A lien refers to the legal claim over your property by the government or a specific creditor. A levy, on the other hand, refers to the actual seizure of property in order to satisfy a debt.  Individuals who fail to pay their debts without filing for bankruptcy may face one or both of these penalties. In the event that a levy is put in place, your creditor has the right to repossess and sell property that you own, such as your car or home—as well as property that is yours but held by another party, such as your bank accounts, retirement accounts, dividends, and even the cash value of your life insurance policy.

Foreclosure

Individuals who fail to pay their mortgage for a prolonged period of time may face foreclosure, a process in which the rights to your property are taken away and the property is sold in order to satisfy unpaid debts and liens.

Don’t let outstanding debts increase your risk of repossession, foreclosure, or other bankruptcy consequences . Get the legal representation you need by contacting the Burr Law Office at (262) 827-0375. You can also set up an FREE initial consultation by visiting us online.