Credit card debt is one of the most common problems facing those with serious financial issues. The stress can become compounded with collection calls, the threat of lawsuits and wage garnishment. A wage garnishment can be hard to stop once it begins and can be devastating to those already facing financial hardship. However, certain protections do exist for those who qualify.
Types of Garnishment.
Two different types of garnishment exist: wage garnishment and non-wage garnishment. A wage garnishment means the money to pay the debt is taken directly out of your paycheck. However, with a non-wage garnishment, the money comes out of your bank account. Wage garnishments do not happen automatically. They come from a court order and a judgment on the debt. When it comes to credit card debt, the creditor must first have filed a lawsuit and received a successful judgment against you in court.
Where You Are in the Process.
Many times, you can stop the wage garnishment from happening depending on where you are in the process. If you find yourself at the start of the legal process or if a judgment has not yet been issued, you may be able to work out a plan directly with the creditor. However, if a lawsuit has already been filed, it is recommended you seek out the assistance of an attorney to protect your legal rights. The worst thing a person can do is ignore the lawsuit. Ignoring a lawsuit will result in the creditor winning a judgment against you by default.
Protection from Wage Garnishment.
Once the judgment on the debt is issued, stopping the garnishment can be very difficult. Sometimes, however, it is possible to at least negotiate the amount owed with the creditor to lessen the length of the garnishment. If you tried to work with the creditor before the lawsuit was filed and are able to work with them before the judgment is entered, you may be able to negotiate down the amount owed. Once the judgment is entered, however, many creditors are simply not motivated to settle on the garnishment. After all, they have already incurred legal fees to file a lawsuit and be granted a judgment, so they may have very little motivation to settle on receiving payment for their debt.
Many clients ask if bankruptcy can eliminate wage garnishment. Bankruptcy laws in Florida provide clear protections for individuals and families. By taking proper action, you can quickly stop wage garnishment while building a strategy for a better financial future. If you are struggling to pay off credit card debt, this category of debt can be easily discharged in bankruptcy. If the writing is on the wall that you will be forced to pay this unsecured debt in a garnishment, it may be a good option to explore with a bankruptcy attorney.
Exemptions to Wage Garnishment.
Once a garnishment order has been issued, many clients worry that they will lose all or most of their paycheck due to the garnishment. However, certain wage garnishment exemptions do exist in these situations to protect you. The Department of Labor has rules for how much of a person’s paycheck a creditor can garnish. For most ordinary garnishments, a creditor is only allowed to garnish the lesser of 1) 25 percent of the person’s disposable earnings, or 2) the amount of the person’s disposable earnings that is more than 30 times the federal minimum wage. The purpose of these laws is to protect consumers from not being able to pay for basic, living expenses. Florida offers a “head of family” exemption, which ensures that if a person provides more than half the cost to support another person or child, that individual’s wages will be protected. If your income is based on Social Security, child support, disability benefits or spousal support, this income cannot be garnished, which offers protection to individuals who live on a fixed, limited income.
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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.
