Tuscaloosa Wage Garnishment Lawyer
Did you know that if you have way too many unpaid debts that creditors can take money directly out of your paycheck? It sounds illegal, but it’s not. Creditors garnish wages from thousands of Americans every year because they have too many unpaid medical bills, credit card bills, student loans, you name it. But the good news is that stopping wage garnishment is possible, especially with top-notch legal counsel. Many Americans file bankruptcy in order to stop wage garnishments, but there are other options too. Tuscaloosa’s top wage garnishment lawyer – Eric Wilson – explains this and more below.
If you’re crushed under the weight of your debt and you’re looking for a fresh start, look no further. We are a debt relief law firm that has extensive knowledge of bankruptcy law. Tuscaloosa wage garnishment lawyer Eric Wilson is ready to start an attorney client relationship with you today. Call 205-349-1280 to schedule a free consultation.
What is Wage Garnishment?
Wage garnishment occurs when creditors file a court order that instructs your employer to withhold a specific amount of money from your paychecks every month. This is basically a debt collection method. Creditors will continue garnishing your wages until your debts are paid off.
Another form of wage garnishment is called a bank levy, or bank garnishment, where creditors take money directly out of your bank account in order to pay off your debts. Even though both of these types of wage garnishment sound illegal and cruel, they are completely legal.
In order to legally garnish wages, creditors must sue you and win. Once this happens, creditors will have a default judgment against you that can last up to 20 years in many states. In some cases though, creditors don’t have to sue you at all before they can garnish your wages. For example, if you owe lots of money on student loans, back taxes, or child support, creditors (or the IRS) can begin wage garnishment without a court order.
How Much Money Can Creditors Take Out of Your Paycheck?
If you’re new to the world of wage garnishment, you’re probably wondering how much of your money creditors can take. Don’t worry, they can’t take your whole paycheck and leave you with nothing. There are federal limits for wage garnishments.
According to Title III of the Consumer Credit Protection Act (CCPA), creditors can only garnish 25% of your weekly disposable income. Or, creditors can garnish your weekly disposable earnings multiplied by 30 times the federal minimum wage, whichever is less.
For the sake of understanding this concept better, here is an example scenario. After taxes and other necessary deductions, maybe you have $400 of disposable income every single week. 25% of $400 is $100.
Now, let’s do some math involving the federal minimum hourly wage, which is $7.25. $7.25 times 30 equals $217.50. $100 is less than $217.50, so your creditors would likely take $100 out of your paycheck every single week until your debt is paid off.
Garnishment Limits for Child Support Debt
Federal law has different garnishment limits for debts like child support, student loans, and unpaid taxes.
If you’re the primary source of financial support for a child or a spouse, creditors can take 50% of your weekly disposable earnings from your paycheck. If you’re not the primary source of financial support for a child or a spouse, creditors can take up to 60% of your disposable income. Lastly, if you’re more than 12 weeks behind on child support payments, creditors can legally garnish an additional 5% of your weekly disposable income.
Garnishment Limits for Federal Student Loans
The U.S. Department of Education can garnish up to 15% of your weekly disposable earnings in order to pay off your student loan debts.
Garnishment Limits for Unpaid Income Taxes
In most cases, the Internal Revenue Service (IRS) can garnish up to 15% of your weekly disposable income in order to pay off back taxes. However, this limit can certainly vary depending on the number of people who are financially dependent on you and other standard deductions.
How Many Americans Endure Wage Garnishment Every Year?
A report from the ADP Research Institute states that more than 7% of the 13 million Americans that were surveyed suffered wage garnishment in 2013. The report also claims that more than 10% of Americans between the ages of 35 to 44 suffered wage garnishment in 2013. Half of the people in this age bracket owed child support money while the other half owed money for various consumer debts.
Which Sources of Income Are Exempt From Wage Garnishment?
Listed below are some sources of income that creditors can’t touch at all, no matter how much debt you’ve accrued over the years.
- Child support or alimony payments from an ex-spouse
- Unemployment benefits
- Social Security Income (SSI)
- Disability benefits
- Pension or retirement program benefits
Your Wage Garnishment Rights
The Fair Debt Collection Practices Act (FDCPA) provides all Americans with specific rights in regards to wage garnishment.
- You must receive a notice from your creditor about the court judgment.
- If you don’t owe the debt that the court judgment says you owe, you can dispute it.
- If the court judgment contains inaccurate information, you can dispute it.
- You have the right to keep certain types of income. But it’s important to remember if your SSI is already in your bank account, your creditor could very well garnish that money.
- Your employer cannot fire you just because of a wage garnishment notice.
- If wage garnishment will cause you great economic hardship, you can challenge it.
An experienced attorney, such as Eric Wilson, will work tirelessly to defend these rights on your behalf.
How to Stop Wage Garnishment
If you’ve received your first-ever wage garnishment notice, you may feel hopeless. But it’s important to remember that you have options to stop wage garnishments. Listed below are just a few things you can do in response to a wage garnishment order. Before you make a decision, it’s best to have an experienced bankruptcy attorney on your side. Eric Wilson will carefully review your financial situation and help you determine whether you should take legal action.
File for Bankruptcy
The first option is filing bankruptcy. Many people view a bankruptcy petition as a last resort and an “end-of-the-world” decision that can ruin their lives – and credit – forever. This is simply not true. When you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you can pay off the majority of your debts in as little as a few months. Additionally, having a bankruptcy petition on your credit report for 7 to 10 years is a small price to pay for freedom from your debts.
There are many other benefits that come with a bankruptcy filing as well, such as stopping a wage garnishment order. This is how it works: an automatic stay begins immediately when you file for bankruptcy. This automatic stay not only stops wage garnishment in its tracks, but it also prevents further creditor harassment, foreclosures, repossessions, and more.
It’s important to remember, though, that filing bankruptcy doesn’t stop all collection efforts. If you have high priority unpaid debts – such as alimony and child support – you could still endure wage garnishment once the automatic stay begins. Bankruptcy lawyer Eric Wilson will explain all this and more when you hire his legal representation.
Claim Economic Hardship
Remember: one of your rights under federal law is that you can challenge a wage garnishment order, especially if it will cause you significant economic hardship. You can do this through a court petition. The attorneys at Eric Wilson Law LLC can help you determine if claiming economic hardship is the best option for you. Additionally, they can teach you how to formulate a persuasive court petition.
Claim Creditor Violation
Let’s say your creditors fail to notify you about your wage garnishment order or they take more than the maximum amount mandated by law. If this is the case, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) and potentially stop wage garnishments. If creditors have violated your rights, it’s always a good idea to hire a bankruptcy attorney to defend you.
Undergo Debt Counseling
If you’re not ready to file for bankruptcy but you need some kind of financial intervention, consider undergoing debt counseling with Eric Wilson Law LLC. Our team can help you gradually pay off your debt through a monthly payment plan, which would help you avoid wage garnishments altogether. Additionally, a wage garnishment lawyer like Eric Wilson could potentially work out a debt settlement with your creditors. This is another way to avoid wage garnishments and pay off your debts slowly instead.
Undergo a Trusteeship
Lastly, you could enter into a trusteeship with a qualified bankruptcy trustee. If you’re in a trusteeship, creditors legally can’t garnish your wages. This is how a trusteeship works: you pay a lump sum to your creditors through your trustee.
Call a Tuscaloosa Wage Garnishment Lawyer at Eric Wilson Law LLC Today
If you were recently notified through a court order that your creditors are going to start garnishing your wages, you have options. But it’s crucial to seek legal advice from our law firm before you make any decisions. Our team of experienced attorneys have extensive knowledge about the bankruptcy code and how it could possibly solve your debt crisis. Call 205-349-1280 to schedule a free consultation with Tuscaloosa’s top bankruptcy attorney – Eric Wilson.