A wage garnishment is an emergency situation– no question about it.
The garnishing creditor can get up to 25% of the earnings left over after deductions for taxes, social security, SDI, Medicare, and health insurance.
But, you can fight wage garnishments. This post explains your options and some of the steps involved.
***The information in this post does not apply to garnishments related to domestic supporting obligations, taxes, and student loans. They have their own rules.***
A debt buyer or creditor usually must sue you and get a judgment against you before it can garnish your wages.
For most people, a wage garnishment happens because a creditor is trying to collect on a judgment.
Some past due domestic support obligations, taxes, and student loans don’t need to be reduced to a judgment before they can be enforced via garnishment.
Yes, there are a few ways to stop wage garnishments.
1. Attempt to negotiate with the creditor. It’s possible the creditor will negotiate with you if you can offer a lump sum payment. The creditor would almost always prefer to get their money now vs. going through a long garnishment process.
2. File exemptions with the levying officer. (This is usually the Sheriff.)
3. File bankruptcy. Bankruptcy stops most wage garnishments the moment the bankruptcy is filed. We can usually file a bankruptcy within 24 hours of your first phone call to our office. Don’t delay if you have a garnishment that’s about to go into effect. Bankruptcy can stop the garnishment immediately.
You will typically need the instructions and forms below to file your exemptions. You might need to give the levying officer other documents as well; these will just get you started.
Yes. The bankruptcy automatic stay usually goes into effect the moment your bankruptcy case is filed.
The automatic stay is the court order for all collection activity to stop. Wage garnishments are considered collection activity.
The automatic stay applies to your debts that exist as of your bankruptcy filing date.
We can file your bankruptcy within 24 hours of your first call to our office.
The moment your case is filed, the bankruptcy automatic stay orders parties to cease all collection activity. A wage garnishment is collection activity.
We do need to get some information from you in order to prepare your case, so call as soon as you know about the garnishment. While we do handle emergency filings, it’s always better to call us as early as possible.
Yes. Even if some money has already been taken from your paycheck, a bankruptcy filing will stop the garnishment.
Yes, under certain circumstances.
You can get back previously garnished funds if:
If you want to get that $250.00 back, you will need to consider whether to “let the garnishment ride” for a few more pay cycles.
Once the total amount garnished reaches $600.00, you can get the funds back by filing bankruptcy.
VERY IMPORTANT: you would need to be able to exempt the funds, and you can only recover funds garnished in the 90 days prior to your bankruptcy filing date.
You can get back the funds garnished during the 90 days leading up to your bankruptcy filing date.
At least $600.00 must have been garnished during the 90-day period for you to recover the funds, and you must be able to exempt the funds in your bankruptcy.
The answer depends on how you stop the garnishment.
Filing exemptions with levying officer: If you stop the garnishment by filing exemptions, you have put out the immediate fire.
But, the judgment is still there, waiting to be collected. You could face future garnishments, bank levies, and liens until the judgment is paid.
Judgments accumulate interest at 10% per year in California.
Filing bankruptcy: if you stop the garnishment by filing bankruptcy and you successfully complete the bankruptcy, the judgment will usually be discharged in the bankruptcy (for Chapter 7.)
In Chapter 13, the amount of the judgment left over after you have made all plan payments will usually be discharged in the bankruptcy.
You won’t have to worry about future garnishments, levies, and liens.
We help clients fight garnishments various ways, as discussed above.
We have found the overall most effective and least expensive option is usually bankruptcy.
It puts an end to the judgment nightmare and lets you sleep at night without worrying about bank levies, liens, and more wage garnishments.
It’s especially helpful if you can get back previously garnished funds. The bankruptcy might more than pay for itself.
Give us a call at (805) 284-0760 for a free consultation to discuss all your options for stopping a garnishment and getting your money back.