If you are in debt and unable to make payments to your creditors, wage garnishment is a tool that can be used against you. Money is taken directly from your paycheck (wages) and given directly to the creditors without ever making it into your hands or your bank account.
Though your creditors get paid, it can create a world of other problems for you. Anyone with extreme debt understands the delicate triage that comes with paying your bills – you have priorities and if a bill that is not a top priority is paid directly from your paycheck, it can trigger a landslide of even more serious financial problems. Luckily, it is possible to stop wage garnishment.
What Types of Debts Get Paid through Wage Garnishment?
Typically, it is unsecured credit cards that trigger wage garnishment. Since there is no house on which to foreclose or car to repossess, unsecured creditors are limited as to how they can force you to pay. Medical debt is also sometimes handled through wage garnishment.
How Much Can Creditors Take?
The good news is creditors are not permitted to take your entire paycheck to fulfill your debt. In New York, an unsecured creditor, like a credit card, is limited to 10% of your gross wages. While this leaves you with money to pay for necessities, it is still a fairly large chunk of your income. And in the case of owing the IRS or child support this amount can be even higher.
Will My Employer be Aware of the Garnishment?
Yes. Your payroll department issues your paycheck and they must comply with the court order to garnish your wages. Your employer cannot take action against you for having your wages garnished, so you don’t need to worry about being fired because you are in financial trouble. Unfortunately, if an outstanding debt gets to this point, you will not be able to avoid having the payroll department know your personal financial business.
How Do I Stop Wage Garnishment?
Think you can just quit your current job and move onto another place that is not aware of the garnishment? Think again. Though this can put the garnishment on hold, it is unlikely to end it all together. All the creditor needs to do is seek another court order to have your wages garnished.
There are ways to successfully stop wage garnishment, but it takes drastic financial action on your part. The most obvious is to pay the debt in full or settle it for an amount approved by the lender. The second is to file for bankruptcy. The automatic stay created by bankruptcy stops wage garnishment and all other collection efforts.
Have your wages been garnished or are you facing other serious financial problems because of debt? We can help. Contact the law office of Frank J. LaPerch, PC at 845.942.5500.