Understanding Wage Garnishment
If you have fallen too far behind on your bill payments, your creditors may decide to pursue a wage garnishment, which will send a chunk of your paycheck directly to your creditor from your employer. Wage garnishment requires a court order, in most cases, resulting from winning a collection lawsuit against you. This court order will require your employer to withhold a certain amount from your paycheck, which then goes to the creditor, which can be a real financial blow.
It is important to note that not every form of debt requires a court order for wage garnishment. If you are behind on child support, student loans, or taxes, creditors are allowed to garnish your wages without any court action.
Whether or not a wage garnishment requires a court order, you should still receive written notice prior to the garnishment. This notice provides you time to respond to the garnishment and protect some of your income.
How Much can Creditors Take?
Although Georgia law allows your creditors to garnish your wages if you are behind on your payments, it limits the amount to 25% of your disposable income, meaning your pay after taxes but before optional deductions like health insurance, or weekly earnings over $217.50, whichever is less. That amount may be different, though, if you have wage garnishments which do not require court action.
● Child support: Up to 50% of your disposable income, or up to 60% if you do not support a child or spouse
● Student loans: Up to 15% of disposable income
● Taxes: Varies based on dependents and deductions
If you have multiple garnishments at the same time, the maximum allowance is 25% of your pay, unless one of the creditors is allowed to take a higher percentage, such as for child support.
How to Fight Wage Garnishment
There are certain earnings which are exempt from wage garnishment. This means that these earnings are not counted as disposable income. Exempt earnings in Georgia include:
● Social Security benefits
● IRA benefits
● Veteran benefits
● Worker’s compensation
● Medicaid or various disability benefits
● Child support
If you believe that you qualify for an exemption, consult an attorney right away. You will need to file paperwork quickly to contest the garnishment. If the court approves a hearing for you, then you will need to bring proof of your exemptions in order to get the garnishment reduced or stopped.
Bankruptcy is another option for stopping wage garnishments. If you file for bankruptcy, all debt collection actions against you must stop, including garnishment. However, a Chapter 13 bankruptcy will still require you to create and stick to a repayment plan, and a Chapter 7 bankruptcy will not stop wage garnishments for child support or alimony. These limitations mean that bankruptcy is not the best choice in all wage garnishment cases, so be sure to consult an attorney before deciding to file.
Contact an Experienced Attorney
If you are facing wage garnishment, do not try to deal with it on your own. The attorneys at Cornwell Law Firm can help you to keep as much of your income as possible. Contact us today to schedule a consultation.