Stopping Wage Garnishment
It can be distressing to learn that a creditor has gone to court for an order to garnish your wages. A wage garnishment order permits money to be taken directly from your paycheck and sent to the creditor to whom the order applies. That money never goes into your pocket. This situation is particularly upsetting if you already owe other creditors, and the wage garnishment renders you unable to pay off your existing debts. One benefit of filing for Chapter 7 bankruptcy in Levittown is stopping wage garnishment. Seek the guidance of knowledgeable attorney John M. Kenney in deciding whether Chapter 7 is right for you.How Pennsylvania Bankruptcy Affects Wage Garnishment
You should be aware that both federal law and Pennsylvania law limit wage garnishment. Your wages can be garnished without a court judgment in the case of income tax debt, court-ordered child support, and defaulted student loans. In Pennsylvania, court-ordered wage garnishments are permitted under narrow circumstances, such as spousal support, back rent on a residential lease, court-ordered restitution in criminal matters, certain taxes, and obligations associated with divorce distribution of property. Your wages can be garnished if you have already been sued for medical debt or credit card payments, and the creditor obtained a judgment. This can inspire panic, but fortunately garnishments are restricted.
There are limits to how much money can be garnished from your paycheck because the law recognizes you will need to pay your basic living expenses. Only 10% of your net wages can be garnished to satisfy a judgment for back rent or taxes. Net wages are wages minus federal and state taxes, FICA, health insurance premiums, union dues, and contributions to your retirement plan. Garnishment is even further limited if it would take you below federal poverty guidelines, and it is not allowed at all if your salary falls below federal poverty guidelines. If your disposable income is less than 30 times the federal minimum wage in Pennsylvania, your wages cannot be garnished for domestic support obligations, student loans, or federal taxes.
If you need wage garnishment to stop, and you owe significant debt, it may be wise to file for Chapter 7 bankruptcy. Filing for bankruptcy will put into place an automatic stay that stops all collection activities, including wage garnishment. If you are truly hampered by wage garnishment, you can file on an emergency basis to stop the wage garnishment. If you successfully file for Chapter 7 bankruptcy, your dischargeable debts are discharged at the end of the process. This means that certain wage garnishment will be over. However, student loans and taxes are not dischargeable. If your wages have been garnished to pay student loans, you will not be able to stop that garnishment by filing for bankruptcy.
An experienced bankruptcy attorney can help ensure that you time your bankruptcy petition in a way that is beneficial to you. Under section 522(h) and section 547 of the bankruptcy law, a debtor can recover money that was involuntarily taken in the 90 days before the bankruptcy filing. This includes money taken by wage garnishment. However the limitation is that, if $600 or more was garnished before filing for bankruptcy, you can recover the money. If less than $600 was garnished in the 90 days before filing, the creditor keeps that money. Retaining an attorney can ensure that you do not file too soon.Discuss Your Wage Garnishment Matter with a Bucks County Attorney
You must pass the means test to qualify for Chapter 7 bankruptcy. If you qualify, you can use the filing of bankruptcy to obtain an automatic stay of wage garnishment. Stopping wage garnishment in Bucks County can be a significant relief depending on your circumstances. Contact experienced bankruptcy lawyer John M. Kenney to find out whether filing for bankruptcy is a good solution to your financial distress. You can reach him by phone at (215) 547-3031, or by submitting an online inquiry. We serve clients in Bristol, Morrisville, Fairless Hills, Yardley, and Langhorne.