Can I Stop A Wage Garnishment or Bank Account Garnishment by Filing Bankruptcy?
If a creditor has sued you for a debt and obtained a judgment from the court, that debtor may apply for a wage garnishment. Credit card companies and medical providers often file debt collection lawsuits to collect debts in Florida. In addition, when the Internal Revenue Service (IRS) has a lien against you for income taxes you owe, it can also take money from your paycheck or your bank account. Florida laws permit certain creditors to garnish wages and seize money from bank accounts. When you are struggling to pay living expenses, it can be devastating for money to suddenly disappear from your bank account or your paycheck.
Our Daytona bankruptcy lawyers can help you stop wage garnishments and stop bank account garnishments by filing a Chapter 7 or Chapter 13 bankruptcy case. In addition, you can also eliminate your other debts through the bankruptcy filing while protecting your income and property from garnishments.
Using Wage Garnishments to Collect Debts in Florida
The first step in the wage garnishment process in Florida is for the creditor to file for a judgment against you. A creditor files a debt collection lawsuit with the court and serves you with a copy of the papers. If you do not respond to the lawsuit before the deadline, the creditor can obtain a default judgment from the court for the money you owe to the creditor.
After the court grants the judgment, a creditor must file a Motion for a Continuing Wage Garnishment order. Because this motion is filed ex-parte with the court, you will not receive notice that the creditor has applied for a wage garnishment. Once the judge grants the creditor’s motion, the Continuing Writ of Garnishment is served on your employer. Therefore, your first notice that your wages are being garnished may be when you see the deduction on your paystub. Wage garnishment orders can require your employer to freeze up to 25 percent of your pay to be forwarded to the creditor.
Your employer must comply with the court’s order. However, your employer has 20 days to respond to a Continuing Writ of Wage Garnishment. The response should be served on the plaintiff/creditor. You may also object to the wage garnishment by filing a motion with the court or a claim of exemption with the court. If you fail to object or if the court denies your objection or claim of exemption, the court will enter a Final Judgment of Garnishment. The Final Judgment requires your employer to continue deducting up to 25% of your wages until the creditor’s judgment is paid in full.
You must remember that there are some exceptions to this general procedure. If you owe money for income taxes, student loans, or child support, your wages could be garnished without a court order. Those debts are handled differently from general unsecured debts. However, a bankruptcy filing can also stop wage garnishment for these debts allowing you to handle the debts through a bankruptcy filing instead of a wage garnishment. Our Daytona bankruptcy attorney can explain how to do this during a free appointment.
Asserting a Claim of Exemption for Wage Garnishments
Two main exemptions could apply in Florida wage garnishment cases.
Under the head-of-household exemption, wages, compensation, and earnings for services or personal labor are exempt from garnishment. You are considered the head-of-household if you are legally or morally responsible for supporting a dependent such as a child, spouse, or parent. The exemption usually applies if you provide more than one-half of the support for one or more dependents.
The second exemption that might apply in your case is the weekly income exemption. If your disposable income is less 30 times the federal minimum wage each week, your income cannot be garnished. Your disposable income is the amount of your wages after your employer makes all deductions required by law. Therefore, if you earn minimum wage, you may be exempt from a wage garnishment.
However, for either exemption to apply, you need to assert the exemption by responding to the wage garnishment. If you fail to respond, the garnishment continues even though you may qualify for an allowable exemption.
Bank Account Garnishments
The process for obtaining a bank account garnishment is more complex than obtaining a wage garnishment order. However, it is possible for a creditor, especially the IRS, to freeze your bank accounts or seize money from your bank account. A Daytona bankruptcy attorney can help you avoid bank account garnishments by eliminating your debts through a bankruptcy filing.
Stop Wage Garnishments and Stop Bank Account Garnishments with Bankruptcy
Filing a Chapter 7 or Chapter 13 bankruptcy petition will immediately stop wage garnishment and bank garnishment. When you file your bankruptcy petition, the bankruptcy automatic stay protects your assets from being seized by creditors. Creditors are not permitted to take any further action to collect a debt, including garnishment, without bankruptcy court approval. Therefore, you can stop a creditor from taking money out of your paycheck by filing a bankruptcy petition.
Furthermore, if the debt is a general unsecured debt, which applies to most debt collection judgments, you can eliminate that debt entirely through a Chapter 7 case without paying any additional money to the creditor. In a Chapter 13 case, you may pay only pennies on the dollars to eliminate the debt.
Furthermore, if the wage garnishment is for a debt that is not dischargeable, such as past due child support or income taxes, you can still stop the wage garnishment and settle the debt through a Chapter 13 repayment plan. The bankruptcy plan allows you to spread out the debt over 60 months while also getting rid of your other debts in the process.
Contact a Daytona Bankruptcy Attorney for More Information
Our Florida bankruptcy lawyers can help you stop wage garnishments and get out of debt through a bankruptcy filing. In most cases, a bankruptcy filing is more affordable than wage garnishment,and you can eliminate most, if not all, your debts instead of just one debt. For a free bankruptcy consultation with a bankruptcy attorney in Volusia County, call (888) 316-2131 or use the contact form on our website to contact our office.