They Just Garnished My Paycheck! Can I Make Them Stop?
You have been sued on a debt and either you:
- didn’t receive notice at your current address or
- got notice and just didn’t know what to do.
In any case, the creditor suing got a judgment against you and proceeded to file a garnishment action to collect on that judgment. Sometimes, the creditor will go after the money you hold in your checking and savings accounts. That is called a “bank attachment.” But usually, if you have a job, the creditor will request a “wage garnishment.”
In Ohio, a general creditor can garnish up to 25 percent of your disposable income up to a maximum of your total net earnings less 30 times the current federal minimum wage. In the majority of cases, it is 25 percent of what is left over after deducting taxes. For most people, surviving on what remains in the paycheck is just no possible. So how do you make it stop?
1: The Automatic Stay
When a debtor files for bankruptcy relief, there is a mechanism in the law that requires everyone to stop what they’re doing in order for the Trustee appointed to the case to administer the “bankruptcy estate” (a fancy word for all the stuff you own at the time the case was filed).
That mechanism is called the “automatic stay.” Since it is automatic, any efforts to gain access to your property after you file violate the stay and any collections would be void.
This means the garnishing creditor may not continue to receive payments on their judgment. Moreover, they must return anything they get from the garnishing court to the debtor. If the creditor fails to stop the garnishment and continues to collect, that creditor may be subject to sanctions by the Bankruptcy Court.
2: No Money Left to Pay Fees
Of course, this is all well and good were it not for the fact that most folks subject to garnishment don’t have a lot of money left over at the end of the day to pay a lawyer’s fee plus the court’s filing fee. So how can they afford to file and stop the garnishment? It’s a classic Catch 22!
There are two options for dealing with this reality:
- First, attorney fees and even court fees can be paid out of a Chapter 13 plan. So if you are filing under that section of the Bankruptcy Code, the lack of funds should not pose a great impediment to getting a case filed and halting the garnishment.
- Trickier is the second option. In Chapter 7, any amounts owing to the attorney at the time of filing are dischargeable as with any unsecured debt.
So how do you get a bankruptcy counselor to take your case and get it filed promptly? What if you don’t have a rich uncle or sweet old grandma to give you the money?
In our office, we offer a plan called “bifurcation.” What this entails is breaking the case up into two parts: pre-filing and post-filing.
We have two fee contracts that cover each part. The first contract applies to work to be done up to and including filing the case with the Court. The second contract, which is signed after the case is filed, refers to all tasks to be accomplished up through the meeting with the Trustee and any matters arising thereafter. This allows a struggling debtor to get his or her case filed in a reasonable period of time. It also allows them to stop the bleeding of much-needed wages.
Contact a Cleveland OH Bankruptcy Attorney to Learn More About How to Stop Wage Garnishment
If you have questions about how to stop wage garnishment, speak to a Cleveland bankruptcy attorney at Benson Law Firm today.