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Three Options When Facing Wage Garnishment

wage-garnishmentWhen you experience wage garnishment, it is likely you face considerable hardship. Individuals who cannot keep debt current likely do not have much left over for food, shelter, and basic needs of living. Income being reduced further through garnishment exacerbates this situation, especially considering the high cost of living in Long Island, NY.

Wage Garnishment Options

If your wages are being garnished, you have three options. These are explained below.

Chapter 7 Bankruptcy

If you receive calls from creditors other than the one garnishing you and might face another lawsuit and garnishment, it may be time for a fresh start. A Chapter 7 bankruptcy offers that by discharging your debt. While you cannot discharge student loans, support obligations or taxes, this process will stop wage garnishments.

Filing a bankruptcy starts an automatic stay. During this time, creditors cannot continue with collection activity including telephone calls, mail, repossession or garnishment. This restores your income to its previous levels and if any amount was garnished after filing, the creditor must return it to you.

When you finish a bankruptcy, the debt is discharged meaning you no longer owe it. At that point, you are no longer vulnerable to garnishment unless you still owe support, taxes or student loans.

Vacate Judgment

The process of vacating a judgment renders it invalid. Wage garnishments cannot occur without an effective judgment so if you vacate the order authorizing the garnishment against you, your hardship may end.

This is not an easy legal process. To vacate a judgment, you must file it within one year of it being entered. Since most wage garnishments happen within two or three years of issuing a judgment, you are likely already well past this deadline. If your creditor acted quickly, this could be an option if the judgment was not rendered properly.

Grounds to vacate a judgment include:

  • Newly discovered evidence that shows the debt is invalid;
  • Fraud, misrepresentation or misconduct by the creditor;
  • Lack of jurisdiction; or
  • Previous orders rendering the judgment invalid.

When debtors file successful claims under the Fair Debt Collection Act, they often secure a vacated judgement. However, unless you faced irregular developments during the lawsuit, you are unlikely to find this effort worthwhile.

File Exemption

Creditors cannot garnish all types of income. If you are facing wage garnishment against social security, disability payments, retirement funds, child support or spousal support, the creditor is behaving illegally. You can file an exemption to protect these income sources and the creditor must reimburse you for the amount garnished and avoid taking additional funds.

State exemptions also apply. In New York, a creditor can only garnish 10 percent of your gross wages or 25 percent of your income to the extent that exceeds 30 percent of minimum wage. Disposable income less than 30 times minimum cannot be garnished at all. Statutes define “disposable income” as the wages left over after your employer applies deductions.

The exception to these limits is child support garnishments. Payments occur through automatic withdrawal and that adjusts if you are behind on your obligation. Higher amounts are subject to wage garnishment too. Up to 50 percent of your earnings may be garnished if you are supporting a child or spouse who is not part of the order. If you do not support additional dependents, that amount increases to 60 percent. An additional five percent may be garnished if you are behind.

There are no exemptions to child support garnishments. If your support payments cause hardships, the best way to reduce that is to return to court and file a modification to change your obligation.

For non-child support garnishments, you can file exemptions if the creditor pursues protected income or if you use most your wages to support dependents. You can apply for these exemptions using a form at the county clerk’s office.

 Stop Wage Garnishment with the Help of our Attorneys

You do not need to linger in poverty if a garnishment makes your financial challenges even more immense. Contact the attorneys at Gertler Law Group, LLC to schedule a consultation.