One of the most humiliating things for someone facing unpayable debts is finding an order for wage garnishment in their inbox. Wage garnishment, as a prominent Cincinnati bankruptcy lawyer will tell you, is when a creditor obtains an order from the courts authorizing them to deduct part of your paycheck or an amount from your bank account to repay a debt that is in default. It is frustrating and humiliating to face wage garnishment, but here are some things to know about the process.
Wage Garnishment Limitations
For starters, there are laws at both the federal and state levels dictating how much of your earnings a creditor can claim through garnishment. These laws are highly dependent on a number of factors, from your state of residence to your income level to the type of debt incurred, so these limits are not set in stone. But for a good majority of debts, as a rule of thumb, the bankruptcy lawyer says that 25 percent of your net earnings is the general maximum. Alternately, there is a formula based on 30 times the minimum wage that can be used if that amount would be lesser than 25 percent.
Losing 25 percent of your paycheck each month to wage garnishment is no small potatoes. Before things deteriorate to the point where a creditor is seeking a judgment against you and looking to garnish your wages, contact a bankruptcy lawyer and have a conversation about your finances; chances are you will be surprised at the amount of viable options you still have, even when it feels like all is lost.