If your wages have been garnished as a result of overwhelming debt, this can be one of the most frustrating circumstances. A wage garnishment occurs a creditor obtains a judgment against you because of a lack of payment of a debt you owe. The creditor can go to court to get the order of garnishment which forces your payments to go straight to the creditor, without your having access to the money. If this has taken place and you want a solution to this issue, a Charlotte wage garnishment lawyer from our firm can help you file for Chapter 7 bankruptcy.
Filing for Chapter 7 Bankruptcy After Wage GarnishmentIn many cases, filing for Chapter 7 bankruptcy can put an end to wage garnishment. After filing for bankruptcy, the garnishment on your wages should immediately end. Under the law, you receive immediate protection from your creditors after filing. An “automatic stay” is placed on your record, which demands that all acts of collection cease. An emergency filing may help if you are in desperate need of having the garnishment cease. In addition, filing for Chapter 7 should take care of the issue so that the garnishment does not begin again. A North Carolina wage garnishment lawyer can help you determine if you qualify for Chapter 7 bankruptcy. You must meet all requirements of a means test. This test determines whether you make too much money to use Chapter 7 for wage garnishment relief. If you do make too much, you may be able to use Chapter 13 or another form of debt relief to stop wage garnishment right away.
Chapter 13 Bankruptcy Will Stop All GarnishmentsWhile Chapter 13 bankruptcy does not automatically eliminate your debt, it does restructure your debt into a more manageable payment plan. Additionally, it will stop all wage garnishments, even domestic support obligations. Because domestic support obligations like child support and alimony cannot be completely eliminated, Chapter 13 is a good option. A Chapter 13 payment plan will give you three to five years to become current on payments. A wage garnishment attorney in Charlotte can help you navigate a Chapter 13 bankruptcy and determine if it is right for you.
What Happens to Wage Garnishments After Bankruptcy?After bankruptcy, your creditors will not be able to resume wage garnishments. Through a Chapter 7 bankruptcy, you will eliminate most of the debt that was threatening your wages. If any of your debt was not discharged, creditors may be able to resume wage garnishment. Through a Chapter 13 bankruptcy, you will structure the debt into a payment plan. Creditors will have to wait for payment through that plan. If you are concerned about how wage garnishment will impact your finances after bankruptcy, call a wage garnishment lawyer today.
Who Can Garnish My Wages in North Carolina?Not ever creditor can garnish your wages in North Carolina. Unlike many other states that allow all types of creditors to garnish wages, North Carolina does not allow a creditor with a money judgment against you to garnish your wages. Creditors with money judgment can still seek money from your bank accounts and use other recovery methods, but wage garnishments are not an option for all creditors. A skilled wage garnishment lawyer can evaluate your situation and help you understand if a creditor can garnish your wages. The following types of debt can result in a wage garnishment:
- Income tax debt
- Past due alimony
- Unpaid court-ordered child support and arrears
- Student loans that have defaulted
- Overpayments of unemployment insurance
- Some counties allow unpaid ambulance bills
- Wage garnishment orders from out of state
How Much Can Creditors Garnish From My Wages?While some debt may be garnished from your wages, the amount that each creditor may garnish is limited.
- The North Carolina Department of Revenue: limited to 10 percent of your wages.
- Out-of-state garnishments: limited to 25 percent of your disposable income.
- Child support arrears: limited to 50 percent of your disposable income if you have dependents who live with you that are not subject to the order, or 60 percent if you have no dependents.
- Student loans that are in default: limited to 15 percent of your disposable income.
- Unpaid taxes may be garnished from your wages, but the limit depends on your deduction rate and dependents.