At Grainger Legal Services, we know that wage garnishment is not only stressful, but also poses an obstacle to a family trying to pay off its other debts. Your employer may not want to deal with the hassle of wage garnishment orders and would rather terminate you. Federal law protects you from termination if you have one wage garnishment, but not if you have more than that. Alabama law prohibits an employer from firing or refusing to hire you if your wages are garnished to deal with child support or criminal restitution. Filing for Chapter 7 or Chapter 13 bankruptcy can be a workable solution to stop wage garnishment in an untenable situation. An experienced Montgomery bankruptcy attorney can evaluate your circumstances, advise you whether bankruptcy would help and guide you through the process.
Wage garnishment usually happens when your creditors have already sued you, won their case and gotten a court order that requires your employer to withhold a portion of your paycheck. Your employer sends the withheld portion to an entity or person to whom you owe money. A wage garnishment order typically stays in place until the debt is repaid. Wages can only be garnished without a court order with respect to certain debts including income taxes, child support or student loan payments.
Under federal law which is in effect in Alabama, creditors for consumer debt may garnish whichever is less of (1) up to 25% of your disposable earnings or (2) the amount of your wages that exceeds 30 times the minimum wage. However, if more than one creditor is permitted to garnish your wages, the creditors together can garnish only 25% or less of your disposable income. Non-consumer debts (such as alimony) cannot be garnished at more than 25% no matter how much more than minimum wage you make.How Can Bankruptcy Help?
Filing for bankruptcy triggers an automatic "stay" of creditors' attempts to collect debts. This means that certain creditors are stopped from these efforts and are notified by the court of your bankruptcy. Creditors that are not stopped are creditors collecting a child support or alimony debt. You can also take it upon yourself to notify your employer, the officer levying the garnishment or the creditor of the bankruptcy. Creditors must demonstrate good cause to the court if they request that the court lift the stay. A stay ends after bankruptcy discharge, after your case is dismissed without discharge, or when the court orders the stay to be lifted.
When you receive a bankruptcy discharge, the underlying unsecured obligation for wage garnishment is wiped out so long as it was included in your bankruptcy petition. Once you receive a discharge for particular consumer debts, the wage garnishment for those debts is also eliminated.Contact an Alabama Bankruptcy Lawyer
Wage garnishment can be a source of stress, but an experienced Alabama bankruptcy attorney Charles Grainger can help you figure out if filing for bankruptcy will help you. We serve clients in South-Central Alabama from our offices located in Montgomery, Prattville, and Troy. Call us at (334) 260-0500 or contact us online to schedule a consultation.