Wage garnishment can be scary and stressful for those struggling with overwhelming debt who may also be facing a job loss or other financial struggles. For that reason, those dealing with wage garnishment should be familiar with the different options that may be available to help them.
What is wage garnishment?
Wage garnishment refers to when wages are directly taken to repay certain debts. Wage garnishment usually applies to situations when a government imposed judgment or debt is owed such as child support, federal student loans or tax debts. Through a judgment granted by the court for a significant debt owed, a portion of wages can be withheld to repay the debt.
There are some caps on wage garnishments through the Consumer Credit Protection Act that protects those having their wages garnished. Wage garnishment can still be a significant strain, however, for a variety of reason including because it is limited to 25% of expendable income in most situations but does not take into account housing, food and medical costs.
Bankruptcy help with wage garnishment
Wage garnishment is one of the concerns that bankruptcy may be able to help with. Filing for either Chapter 7 bankruptcy or Chapter 13 bankruptcy extends the protections of an automatic stay. An automatic stay goes into effect when the filing party files for bankruptcy protection and prevents creditor collection actions during the bankruptcy process. Once bankruptcy protection has been filed for, the automatic stay will end the wage garnishment.
It is generally helpful for those struggling with overwhelming debt to be familiar with the legal protections available to them including bankruptcy protections and how those protections work. Facing overwhelming debt each day is difficult but help may be available.
