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If you have past due, unaffordable debt, wage garnishment provides a very real source of anxiety. Wage garnishments are court orders sent to your employer. By law, the employer must withhold a specified percentage of your paycheck and transfer it to the creditor.

Unfortunately, wage-garnishment orders generally make no provision for how much you can afford to pay.

In many cases, the garnishment results from prior or ongoing financial problems. Unless circumstances have changed, the garnishment will be unaffordable and push you even deeper into unmanageable debt.

When the vicious cycle of mounting debts reaches this destructive level, bankruptcy is often the only way to regain control of your financial life.

How much can be garnished?

Most garnishments are based on a percentage of income. Federal- and state laws govern the percentage amounts. In many jurisdictions, the law bases the percentage on the type of debt owed. Here are some examples of common wage garnishment laws:


• Federal law caps consumer-debt garnishments at 25 percent of net income.
• Many states limit consumer-debt garnishments further, sometimes to 15 percent of net income.
• Child support, when governed by federal law, allows enforcement agencies to garnish 50 to 60 percent of income.
• Some states limit child support garnishments further, sometimes to 25 percent of net income.
• The government limits federal student loan wage garnishments to 15 percent.
• IRS wage garnishments are based on the number of exemptions for which the taxpayer qualifies, which often results in a garnishment of 50 percent of income and upwards.
• Texas, Pennsylvania, and North- and South Carolina prohibit wage garnishments.
• The states that prohibit wage garnishments must still allow garnishments for IRS debt, child support and federal student loans.


Employers must comply with wage garnishment orders

Federal law requires employers to comply with wage garnishment orders. They are prohibited from firing employees because they received one wage garnishment order; however, employers are legally permitted and often fire employees who have more than one wage garnishment order.
A single wage garnishment order often leads to instant insolvency for the debtor. Multiple wage garnishments can destroy the debtor’s career, resulting in inability to repay the debt at all. With such scary consequences, it’s important to avoid wage garnishments in the first place. If wage garnishments have already been issued, getting them lifted is of paramount importance. The situation rarely gets better unless the debtor acts.

How to get wage garnishments lifted

Wage garnishments rarely come as a surprise. The debtor typically knows when he or she has entered the wage-garnishment danger zone. By acting before a court issues a garnishment order, debtors can save themselves money, time and stress.

Try to negotiate payment arrangements with all creditors before any garnishment orders can be issued.

As with a medical problem, an ounce of prevention is worth a pound of cure. Creditors understand the concept of judgement-proof debtors. A judgement-proof debtor has no money, making the judgement moot. Often, creditors look to wage garnishment as a way around this. The debtor may have nothing in the bank, but if he or she has a steady income, the creditor can tap into it.

However, wage garnishments often fail to collect any money. The creditor may spend significant time and money to obtain one and still get nothing. For this reason, they often accept a payment arrangement that allows them to collect without going through the legal process.

For consumer debts like credit cards and car loans, the chances of avoiding wage garnishments through negotiation are very good. The IRS also encourages tax debtors to enter into installment payment arrangements that avoid wage garnishments. Federal student loan borrowers avoid wage garnishment by signing up for income-based-repayment (IBR) plans. These plans reduce payments to as low as $0 based on income. Once enrolled in an IBR plan, debtors are safe from student loan payment garnishments.


When payment arrangements fall through, bankruptcy becomes the preferred option. Bankruptcy works when the debt has spiraled so far out of control that the debtor can’t afford installment arrangements with all of his or her creditors. It also may be triggered by unreasonable creditor demands, such as refusing a payment plan and seeking a wage garnishment for the debt, plus interest, penalties and the creditor’s legal fees.

Chapter 7 bankruptcies wipe out all consumer debt, such as credit cards, car loans, mortgage debt and mortgage deficiency judgements. Debtors who want to keep non-exempt property can use a Chapter 13 to reduce payments based on a three- to five-year repayment plan.

Bankruptcy bars creditors from seeking wage garnishments and nullifies any existing garnishment orders.

Exceptions for non-dischargeable debts

Certain debts are non-dischargeable in bankruptcy, including student loans, tax debt and child support. Creditors may continue to seek wage garnishment orders for non-dischargeable debts despite bankruptcy, and bankruptcy does not stop existing wage garnishments for non-dischargeable debts. Bankruptcy may help indirectly by eliminating consumer debts and freeing up income to pay off non-dischargeable debts.

Wage garnishments wreak havoc on millions of households every year. In an era where the vast majority of Americans live paycheck to paycheck and carry heavy debt loads, wage garnishments are particularly devastating. Many debts, especially IRS debts, student loans and child support, are best handled through installment plans that prevent wage garnishments from being issued. When consumer debt has gotten so out of control that creditors are seeking or obtain wage garnishment orders, debtors can protect themselves by consulting a bankruptcy attorney.

If you are dealing with wage garnishment our Southfield Bankruptcy Law Firm can help. Border Law is a full-service bankruptcy firm that has the experience and knowledge to provide the legal assistance you need. Wage garnishment can transform a difficult economic scenario into an impossible one and a bankruptcy attorney from our law office, will certainly help you as well as assist in turning things around! Call today for a Free Case Evaluation.