If you're getting garnished, this means you have a Judgment against you issued by a Court giving that creditor permission to garnish your assets (usually wages or a bank account) to collect on a debt. Assets that can be garnished commonly include paychecks, bank accounts and tax refunds.
Once you are getting garnished, YOU are now the "debtor" that owes money. The person or company collecting the money from you is the "creditor". There are two types of garnishments and it's important to know each type because a creditor can use BOTH of them against you at the same time.
A "periodic garnishment" allows a creditor to collect money on a regular basis from a paycheck or other income source up to 25% of your disposable earnings. If your employer receives this order, they do not have a choice and must comply with the court order for garnishment. Note that if your garnishment is for child support, the limit can go up to 60% of your disposable earnings. Your disposable earnings are the amounts leftover after deductions from wages required by law are taken out, such as taxes and social security. Let's look at an example:
Bob gets a weekly paycheck of $1,000 per week. He pays $200 in taxes each week and $50 in insurance for himself, so he takes home $750 per week. Bob's employer gets a garnishment Order from ABC company. The mployer calculates that Bob's "disposable earnings" are $800 per week since the $50 per week in insurance is not a required deduction. The employer takes 25% of $800 per week ($200 per week of garnished funds) out of Bob's paycheck.
A "non-periodic garnishment" can also be known as a "lump sum garnishment". It is a one time lump sum removed from usually a bank account or tax refund. These can be renewed until the debt is paid in full.
If you are getting garnished or under threat of garnishment, you have options!
Talk with an attorney about whether filing for bankruptcy may be a good option in your case.
It's also possible with a bankruptcy filing to sometimes be able to recover at least part of the money you've had garnished.
Even if your garnishment has already started, it's possible to STOP it!
Attorney Allison Greenlee Korr handles bankruptcy cases in the counties of Kalamazoo, Van Buren, Calhoun, St. Joseph, Allegan, Hillsdale, Cass and Berrien, call today for a consultation. 269-381-4471