When you’re in debt, the collector assigned to your case may inform you that they will pursue wage garnishment against you if you do not pay. If this happens, it’s essential to understand what you can expect. Additionally, many are unsure if they can file for bankruptcy during these times. If you want to pursue bankruptcy, but your wages are currently being garnished, the following blog explores what you should know about these circumstances. You should also discuss the details of your case with a Memphis, TN wage garnishment defense lawyer to explore your rights during these matters.
What Is Wage Garnishment?
When you owe a debt that has not been paid, you may find that a creditor can obtain an order against you to take a portion of your wages directly from your employer to fulfill some of your obligation to repay what you owe. Generally, in Tennesee, a creditor can only take 25% of your disposable income, or the amount by which your weekly disposable income exceeds 30 times the federal minimum wage. The creditor has a right to take whichever is the larger of the two numbers.
It’s important to understand that while most creditors must go through the courts to garnish your wages, this is not always the case. Depending on the type of debt you owe, some creditors have the right to garnish your wages right from your paycheck without filing a suit against you first. This includes federal student loans, taxes, child support, and alimony.
Can Bankruptcy Stop This?
When you file for bankruptcy, you may be surprised to learn that the wage garnishment will stop. This is because filing for bankruptcy grants an automatic stay, which essentially means that all collection efforts must stop during this process. As such, you may experience relief because this can help you catch up on payments without your wages being garnished.
It is essential to understand that if your wages are taken for alimony or child support, filing for bankruptcy will not impact the collection of these amounts. Additionally, if the debts aren’t settled during bankruptcy, and your case closes, the garnishment may continue.
What Should I Do if I’m Considering Filing for Bankruptcy?
If you’re undergoing garnishment and it’s taking a toll on your finances, understanding the benefits of bankruptcy is critical. However, you should not try to navigate this process on your own. Instead, it’s in your best interest to consult with an experienced attorney to discuss your options and help determine which path is best for you.
At the Arnold Law Firm, we understand how overwhelming these matters can be. That’s why our team is committed to helping you achieve the best possible outcome for your unique circumstances. Contact us today to learn how we can guide you through these challenging times.