Wage Garnishment

A wage garnishment is a court order allowing an employer to withhold a specified amount of income for repayment for a debt. Wage garnishments are only allowed after the creditor has filed and won a lawsuit against the debtor. Federal wage garnishment limits protect workers from excessive garnishments. For example, employers are not allowed to garnish more than 60% of a worker's wage and in four states (Texas, North Carolina, Pennsylvania and South Caroline) certain creditors are barred from garnishing wages.

If a debtor files bankruptcy an automatic stay is initiated which will stop many wage garnishments. Under some conditions the creditor can petition the court to resume wage garnishments, but the court must agree and lift the automatic stay. Consider, however, not all wage garnishments will be stopped by filing bankruptcy. If the debtor has child or spousal support obligations or they owe Federal back taxes (exceptions exist), wage garnishments will not be stopped.

Unsecured debt obligations which are discharged through bankruptcy cannot be collected by the creditor after the completion of the bankruptcy. If the bankruptcy is dismissed, however, and the debt is not discharged, the creditor is legally allowed to resume wage garnishments. Due to the complexity of bankruptcy laws, it is always a good idea to discuss your wage garnishments with a bankruptcy lawyer.