Stop Wage Garnishment With Bankruptcy

Wage garnishments are the most aggressive collection action that a creditor can take against you. Creditors obtain authorization from the court to deduct money from your paycheck to pay off your debt. If your creditors are threatening you with garnishment or your wages are already being garnished, our lawyer at J. Robinson Law Firm, PLLC, in Shelbyville and Frankfort can help.

What Is Wage Garnishment?

Wage garnishment is a legal process in which a portion of an employee’s earnings is withheld by their employer and directly sent to a creditor or government agency to satisfy a debt. This process helps to collect unpaid taxes, child support and alimony, federal student loans, or credit card debts.

However, employees have certain protections under federal and state laws. For instance, employers cannot fire an employee only because their wages are being garnished for any one debt. Also, employees have the right to be notified of the garnishment and to dispute the debt or the garnishment if they believe it is in error.

How Wage Garnishment Works In Kentucky

Here are the steps in the wage garnishment process in Kentucky:

• The creditor must first file a lawsuit and obtain a judgment against the debtor.
• After obtaining the judgment, the creditor must request a wage garnishment order from the court. The court then issues the garnishment order to the debtor’s employer.
• The employer is legally obligated to notify the employee about the garnishment.
• The employer withholds the specified amount from the employee’s wages each pay period and remits it to the creditor or relevant agency.

Employees can dispute the garnishment or claim exemptions like dependent children or head of household status.

The Limitation Of Wage Garnishment In Kentucky

Under federal law, the amount that can be garnished from an employee’s wages is limited to 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage, whichever is less.

Disposable earning is income left after legally required deductions such as taxes and Social Security. For child support, wage garnishment is:

• 50% of disposable earnings if the employee supports another spouse or child
• Up to 60% if the employee is not supporting another spouse or child
• An additional 5% can be garnished for payments over 12 weeks in arrears

Up to 15% of disposable income can be garnished for defaulted federal student loans. For unpaid taxes, the IRS can garnish wages based on the number of dependents and deduction rates.

Timing Matters – Take Action Now

Most people do not know how to deal with creditor actions, including garnishment. Do not ignore letters from a creditor threatening garnishment. The best thing you can do is contact our lawyer, who has the experience, determination and record of success to help you fight wage garnishment.

At the first signs of financial distress, you can prevent major problems by discussing your options with a lawyer. The earlier you take back control, the better. But if you are already knee-deep in trouble, our lawyer can still be an effective advocate on your side.

They will look at your complete situation and help you evaluate what strategy would work best for you. The priority is preventing wage garnishment or stopping it once it has already begun. Filing for bankruptcy – Chapter 7 or Chapter 13 – can stop any creditor actions, including garnishment.

If your wages have already been taken, our attorneys can often get your money back. If the money was garnished by your creditor within 90 days of filing bankruptcy, it can usually be recovered as part of the bankruptcy process.

Weigh Your Options

With Chapter 7 bankruptcy, most of your debts, including credit card debt, medical debt and some tax debt, are eliminated. Some debt cannot be discharged. This is true for student loans, child support, alimony and some secured loans.

Chapter 13 bankruptcy is a plan that involves restructuring your debt. All debt is lumped together, and you make monthly payments for a period of time.

In both cases, once you file for bankruptcy, all creditor actions must stop due to the automatic stay. This allows you time – time to catch your breath, time to figure out the best plan and time to catch up on payments. Life after bankruptcy can mean the chance at a fresh start.

Stop Garnished Wages Today. Talk To Our Attorney.

To stop wage garnishment, turn to J. Christopher Robinson Law Firm, PLLC. To schedule a free initial telephone consultation, call one of our Kentucky offices in Shelbyville or Frankfort at 502-805-9602. You can also contact us online.