A wage garnishment is a legal request by a creditor to take money directly from your paycheck before you get paid. If you owe taxes or fall behind on your federal student loans, the government can make such a request without a court order. All other creditors must obtain a judgment in a court of law before they can legally order your wages to be taken to pay a debt.

The good news is that you’ll usually get notice first, and depending on when your employer calls for payroll (known as the “payroll deadline”), you’ll have a limited amount of time to take action that could stop your wages from falling. to be taken. The amount of your wages that can be taken also depends on who is garnishing. The IRS can take up to 50% of your wages to pay back taxes, so a wage garnishment will hurt you financially if you don’t take steps to stop it. The amount creditors can take ranges from 15% to 50%.

The easiest way to prevent a wage garnishment from occurring is to make a payment arrangement with the creditor right away and start making payments. Unfortunately, this invaluable information is only useful when you have the money to pay for it. If you don’t have the money to pay them, then the next best thing to stop wage garnishment is to file for bankruptcy.

You see, filing a bankruptcy case raises what is called an Automatic Stay, which is a court order to stop all collections against the person filing for bankruptcy protection, including foreclosures and wage garnishments. This makes it a powerful tool against aggressive debt collectors who have gone to the trouble of suing you, getting a judgment, and pursuing their legal debt collection efforts by finding your employer and requesting that they be paid out of your paycheck. .

Depending on your income and financial status, you could file for bankruptcy discharge under Chapter 7 of the Bankruptcy Code, where you stop the garnishment without making a single debt payment. Otherwise, if your income is above the median for your household size (using IRS median family income standards), or if you have assets to protect, such as home equity, then you can propose a plan. of payment according to Chapter 13 of the Code.

Whichever direction you choose to take, you must act fast or the embargo will go ahead. It is important to consult with an attorney to explore all of your options for getting out of debt, and bankruptcy is worth exploring because it is a powerful tool that puts you back in control of your paycheck and gives you breathing room to get back on your feet. foot. financially. Get rid of debt and move quickly toward your financial goals. Most attorneys provide free consultations, so take advantage of their advice even if you don’t hire them. We have helped hundreds of families avoid wage garnishments. Let us know if we can help you too.