While a mortgage company has the right to foreclose on your home if you fail to make timely mortgage payments and your car lender may repossess a vehicle when the owner has failed to make payments, there are other debts which are considered “unsecured” and in those cases, the creditor has limited options to recover monies when payments stop. Credit card companies and medical providers often will threaten to take you to court if you fail to bring your payments up to date.
Georgia allows creditors to garnish you wages in amounts up to 25 percent of your disposable income unless your wages are less than 30 times minimum wage (minimum wage is approximately $15,080). If you are threatened with wage garnishment or if you have been informed a wage garnishment is going to happen, contact a Kennesaw bankruptcy attorney immediately.
While most creditors are required to go to court to secure an order to garnish wages, there are exceptions to this rule; some creditors need not go to court to secure a court order including when you owe:
- Back child support payments
- Unpaid income taxes
- Defaulted student loans
The limit on how much can be garnished can be in these cases is also different than the limits imposed on other creditors so let your Kennesaw bankruptcy attorney know if this is what you are facing because bankruptcy may not help.
How Bankruptcy Stops Wage Garnishment
When you meet with your Kennesaw bankruptcy attorney and prepare all of the documents that must be filed with the courts, the court puts in place an automatic stay. With the exception of taxes, child support payments and defaulted student loan garnishments, all other garnishments must stop immediately. Your creditors will be notified by the bankruptcy court that you have filed bankruptcy and they must notify your employer to stop the wage garnishment.
For a free legal consultation, call (770) 792-1000
What Happens After Bankruptcy?
Once your Kennesaw bankruptcy attorney notifies you that your bankruptcy is going to be discharged, you will no longer owe any money on the debts that resulted in your wages being garnished. Chapter 7 bankruptcy filings wipe out all debt that was not a result of fraud and Chapter 13 allows you to repay the debts you owe over a longer period of time, usually three to five years. Any unsecured debts that remain after Chapter 13 can no longer be collected.
In some cases, it may also be possible for you to reclaim the wages you lost to a wage garnishment. The rules are generally that the garnishment must have occurred within 90 days of filing bankruptcy and the amount must be over $600. You would have to use your personal exemptions to cover these amounts or the court may not approve the complaint to have the wages returned. You should discuss this option with your Kennesaw bankruptcy lawyer to see if it is feasible since it is not always the best option depending on your exemptions and other circumstances.
If you have been notified that a creditor is seeking a court order to garnish your wages in Georgia, you should act immediately. It is often better for you to stop the garnishment before it gets started rather than waiting until you are losing a portion of your income. If your debt has become more than you an handle, contact Roger Ghai, a bankruptcy attorney in Kennesaw at the Law Offices of Roger Ghai at (770) 792-1000 for help filing bankruptcy.