North Hollywood Wage Garnishment Attorney

What Is Wage Garnishment?

Wage garnishment is a legal order requiring an employer to withhold a certain amount of money from a debtor’s payroll and send it directly to one of their creditors. Creditors can pursue wage garnishment if they sue the debtor and obtain a judgment from the court. However, debts related to taxes, federal student loans, child support, and alimony do not need court approval to warrant wage garnishment.

There are federal and state limits on how much a debtor’s pay can be garnished. Federal law generally limits garnishment to 25% of a debtor’s weekly disposable income (income left after mandatory deductions), and California’s limits are the lesser of:

• 25% of the debtor’s disposable earnings for that week; or
• 50% of the amount by which their weekly disposable earnings exceed 40 times the state hourly minimum wage.

Note that the wage garnishment limits are different, however, for debts that do not need to be approved by the court. Unpaid child support, for instance, can have up to 60% of their wages garnished; student loans up to 15%; and unpaid state taxes up to 25%.

Creditors may garnish wages until the debt is paid off or the debtor takes legal action, such as by filing for bankruptcy.

Avoiding Wage Garnishment by Filing for Bankruptcy

When a person files for bankruptcy, an “automatic stay” goes into effect that prohibits most creditors from taking or continuing actions to collect debts. Essentially, those who file Chapter 7 may reap the benefits of an automatic stay that stops wage garnishment and allows them the opportunity to discharge their underlying debts in the process.

Upon filing for bankruptcy, the debtor and their attorney should inform their relevant employers and garnishment creditors of the bankruptcy filing by providing them their case number, filing date, and court location. The quicker this is done, the quicker the garnishment may stop, as a creditor is legally required to stop garnishing wages once they are notified of the bankruptcy.

In any case, after the bankruptcy case closes, creditors cannot resume wage garnishments on any discharged debts (often credit card balances, personal loans, and medical bills). Creditors can resume garnishments on non-dischargeable debts the debtor is still be expected to pay. If the bankruptcy case is dismissed without a discharge, creditors can resume wage garnishment on all the debts.