Understanding Wage Garnishment and What You Can Do to Stop It
No one intentionally falls behind on their bills, and when someone is unable to make a house payment or a car payment or a student loan payment, it is likely because he or she does not have the extra funds to do so. So why does it make sense for creditors and federal agencies to garnish wages from already struggling individuals? It does not.
You work hard to earn an income, and you do your best to meet your financial obligations each month, but sometimes your best is not enough. If you have fallen behind on your bills and recently learned that your wages will be garnished to repay a debt you cannot afford to pay, you may be feeling frustrated, overwhelmed, and worried about how you are going to put food on the table now that that extra bit of money is being taken from your paycheck. At The Port Law Firm, we understand why you might be feeling this way, but we also want you to know that there is hope.
If your financial situation has reached the point where you are getting phone calls from creditors at all hours of the day and where you are only receiving a portion of your paycheck, it may be time to consider other options, such as bankruptcy or another form of debt relief.
The Basics of Wage Garnishment
Wage garnishment occurs when a creditor takes part of your paycheck to pay off a debt in your name. The whole process may seem illegal to you, but unfortunately, it is 100 percent lawful. However, there are limitations that the creditors must abide by and requirements for what types of debts qualify for garnishment. For instance, debts that are not yet six months past due are not eligible for wage garnishment, and creditors who have not attempted to establish a repayment plan with the debtor cannot use wage garnishment as an initial debt collection option.
Additionally, thanks to provisions in the federal Consumer Credit Protection Act (CCPA), the amount of wages that can be garnished is limited. For one, creditors can only garnish money from disposable income, which is the amount of money left over after Social Security and other taxes have been deducted. Health insurance, life insurance, and other benefits are not subtracted from disposable income. Under Title III, the maximum weekly garnishment cannot exceed 25 percent of the employee’s earnings. For individuals who work for minimum wage and 30 hours or less a week, wages cannot be garnished at all. If a person works for minimum wage and 40 hours a week, the amount of money they earn during the remaining 10 hours can be garnished, but no more. Any individuals who earn more than minimum wage and/or work more than 40 hours a week are subject to the full 25 percent garnishment rule.
How Bankruptcy Can Help
Wage garnishment may only help to get one or two debts under control, but if you owe several creditors, it may only serve to put you further behind and make it difficult for you to live comfortably. If wage garnishment has made it difficult for you to put food on your table and to pay for your necessities, such as heat, electricity, gas, and other utilities, you have the power to make it stop. All you need to do is pick up the phone and reach out to the compassionate bankruptcy lawyers at The Port Law Firm. Give our West Palm Beach law firm a call today to get on the path to financial freedom.