Wage Garnishment Laws
At The Sellers Law Firm, our Montgomery bankruptcy lawyers have worked with thousands of clients, and most of them are in a situation where they are facing a wage garnishment; however what we have learned is that most of our clients do not completely understand what a wage garnishment is. To understand a garnishment, you must first understand the process in which the creditor used to obtain a garnishment against you.
To obtain a garnishment a creditor must first file a lawsuit against you. This lawsuit must include the amount of money owed, and the reason why this money is owed to the creditor. For example, just because you're behind on a credit card payment or a doctor's bill doesn't mean that you can be garnished. For those creditors to garnish you, they must file a lawsuit against you, and serve the lawsuit on you. Depending on the amount of money you owe, you will have either 14 days or 30 days to respond to the lawsuit. If you fail to respond to the lawsuit, then the judge can issue a default against you and then issue a default judgment in the amount claimed in the lawsuit. However if you respond to the lawsuit either on your own or through an attorney, the judge will eventually set the matter for trial. Once the judgment is filed in the probate court of the county in which you live, it becomes a secured debt. (For more information on secured debts. (Please see the appropriate page on our website.)
Once the judgment has been recorded, the creditor can begin to issue a garnishment against your wages. In Alabama there are limits to how much money can be garnished from your paycheck. The idea is to supposedly leave you enough money to live on and be able to pay your expenses; however the reality is that once the garnishment takes effect you are generally not able to pay your remaining bills. Under the wage garnishment laws creditors cannot take more that 25% of your disposable earnings or an amount that exceeds 30 times the minimum wage, whichever is the lesser amount. Generally this means that your paycheck will have 25% of your money deducted from it. This applies to all consumer debt and disposable earnings. Disposable earnings are those wages that are left after your employer has made all the required legal deductions.
It must be mentioned that there are a few exceptions to the garnishment rules. Your wages can be garnished without a court order for certain items. These include unpaid income taxes, court-ordered child support, child support arrears, and the defaulted student loans. Under federal law there is a limit to how much money can be taken from your paycheck. For a wage garnishment for child support, only 50% of your disposable earnings may be garnished to pay child support and additional 5% may be garnished from your paycheck for child support payments that are over 12 weeks old.
If you are in default on your federal student loan then the US Department of Education or any collection agency acting on its behalf can garnish your wages without first obtaining a court order. Under this administrative garnishment the Department of Education can take 15% of your disposable income. Finally the Federal Government can garnish wages if you owe back taxes even without a court order. The amount of the garnishment varies greatly and depends upon the number of dependents you have. If you have numerous garnishments, the total amount that can be garnished from your paycheck is limited to 25%.
Most employers believe wage garnishments are a hassle because they have to calculate how much money to withhold, and they have to mail or forward this money to the appropriate agency. There are some restrictions that prevent employers from terminating your employment due to a wage garnishment. Under Federal law your employer cannot fire you or refuse to hire you if you have an income withholding order for child support. Under Alabama law you also cannot be fired if criminal restitution is being withheld from your paycheck.
At The Sellers Law Firm, our Montgomery bankruptcy attorneys can assist you in eliminating a wage garnishment through a Chapter 7 bankruptcy or Chapter 13 debt consolidation. All consultations are always free, and we can usually see you within 24 hours! We have offices located in Montgomery, Selma, Greenville, and Troy. You can set an appointment to meet our team by calling 334-LAWYERS (529-9377). You may also reach us by using "text us" link or Contact Form on our website. Remember that doing nothing changes nothing so call us today!