If you believe your wages or bank account are about to be garnished by a creditor, or you have already received notification that a garnishment has been filed, it is time to consider filing a personal bankruptcy case before you lose money.
How does it work? Once you start falling behind on your bills, your creditors will eventually file a collection lawsuit against you. If a creditor obtains a monetary judgment against you, collection activity can commence against you. One of the most common types of collection tools used by creditors is a wage garnishment.
A wage garnishment is an order from the court requiring your employer to without a certain amount of your wages and send it to your creditor. This is undesirable since in addition to having less income coming home, your employer will also know about your situation. There are limits to how much money can be garnished from your pay check. New Jersey law provides its residents more protection than federal law by in general restricting the maximum amount that can be garnished to 10% of your gross income as long as you earn less than 250% of the federal poverty level. As an example, for a family of 4 that limit is approximately $60,000. If the debtor is earning more than that, NJ courts have discretion to allow larger amounts up to the federal limit.
If you file a Chapter 7 or Chapter 13 bankruptcy anywhere along the garnishment process, as long as it is before your employer receives the garnishment order and deducts the funds from your paycheck, you can stop it before you lose money. It is important to note that unless your employer receives notice of your bankruptcy filing, he or she is required by law to deduct the money or the employer becomes liable to pay it.
As soon as you file your bankruptcy case, the automatic stay goes into effect. The stay is a form of an injunction that prohibits any collection activity against you while your case is pending. This includes a garnishment and any collection lawsuits pending against you. If you want to avoid your employer being given notice of your money troubles and you want to make sure you don’t lose the money from your paycheck, contact us to schedule an initial consultation.
We are bankruptcy lawyers who know how to make a difference in your financial situation. We have experience you can rely on and we care about your results. Contact our New Jersey law firm online by filling out the form or by calling 973-323-2953 to schedule a free initial consultation with an attorney at Levitt & Slafkes, P.C..