When you’re in debt, making ends meet while repaying the funds you owe can be incredibly complex. Unfortunately, many are unable to break this cycle, which can result in falling further into financial trouble. However, when you find that your wages are being garnished, it can cause even more stress. As such, understanding what you can do to stop wage garnishment in Memphis is critical. If this reflects your circumstances, the following blog and a Shelby County, TN bankruptcy lawyer can help you explore your legal options for these complicated and overwhelming situations.
Understanding Wage Garnishment in Memphis, TN
When someone is subject to wage garnishment, it means that they are behind on debt payments to the point where a creditor has received a court order allowing them to take wages directly from the debtor.
How Wage Garnishment Works in Tennessee
In Tennessee, most creditors will need to file a lawsuit and receive a judgment before they can garnish your wages. Once they receive an order, they can contact your employer, who is legally required to withhold a portion of your paycheck to send to the creditor. Tennessee adheres to federal law, which caps garnishment at 25% of your disposable income or thirty times the federal minimum wage ($7.25 in 2025), whichever is less. You should also note that federal law protects you from termination over one wage garnishment.
Debts That Don’t Require a Lawsuit
It’s important to understand that a creditor doesn’t always need a court-ordered judgment, as these are administrative or statutory garnishments. As such, if you are behind on the following debts, garnishment may occur without a lawsuit:
- Child support
- Alimony
- Federal student loans
- Federal or state taxes
How to Stop Wage Garnishment in Memphis
If your wages are being garnished, it can make paying bills and affording household essentials incredibly challenging. Generally, you have two options to deal with garnishments.
Negotiating a Settlement with Your Creditor
The first is to attempt to settle with the creditor. You may be able to negotiate a one-time, lump-sum payment to legally relieve you of your obligations to pay off debt. If you pursue this option, it is imperative to get your deal in writing before making a payment to the creditor.
Legal Options to Challenge Wage Garnishment
Unfortunately, you’ll find that many creditors are unwilling to negotiate settlement amounts, and this is not a viable option if you have many debts. As such, you may attempt to:
- Fight the judgment if you never received the notice or believe there was a clerical error
- Claim exemptions or hardship when applicable under Tennessee or federal law
- Consolidate or refinance your debt
Filing for Bankruptcy to Stop Garnishments
Filing for bankruptcy is often a last-resort option when no other viable path is available. This is an ideal option for those in overwhelming debt, as once you file, you are granted an automatic stay. Essentially, this means that creditors are prohibited from continuing debt collection efforts against you.
Actions Halted by the Automatic Stay
Because the automatic stay seeks to ensure that all creditors are on even footing when someone files for bankruptcy, the stay will stop a number of actions, including:
- Wage garnishment
- Lawsuits
- Collection calls
- Foreclosures
- Liens
- Repossessions
- Bank account levies
Actions That Continue Despite the Automatic Stay
If you have high-priority debts that are non-dischargeable, like alimony or child support, these garnishments can continue. All other creditors must petition the court to lift the stay if they wish to continue collection efforts, which can be a complex process.
Key Documents to Gather Before Filing Bankruptcy in Memphis
If you have made the difficult decision to declare bankruptcy in Tennessee, it’s important to take the necessary steps to gather important documentation to help your case go smoothly. As such, you should gather and organize the following:
- Proof of identity
- Full list of all creditors and their contact information
- Recent collection efforts (letters, garnishment orders, lawsuits)
- Proof of income
- Most recent tax returns
- Lease or mortgage papers
- Vehicle titles
- Monthly budget
- Retirement statements
Get Help from an Experienced Memphis Bankruptcy and Debt Relief Attorney
If your wages are being garnished and you want to break the vicious debt cycle, it’s in your best interest to connect with an experienced attorney who can help you explore your options. When you’re interested in filing for bankruptcy, the team at the Arnold Law Firm can help. We understand how complicated this process can be, which is why we are dedicated to helping you experience relief. Reach out to our firm today to learn more.
