You rely on regular income to support your lifestyle and pay bills, so you expect to be paid your full wages for doing your job. It might seem unfair that someone could divert part of your paycheck, but this is exactly what happens with a wage garnishment. Once a creditor goes through certain legal steps, it is possible that a portion of a debtor’s income will go toward payment of the debt. You certainly want to avoid this outcome by any means possible, so it is smart to review how to remove wage garnishments in Georgia.

There are numerous restrictions that apply to these cases, because the laws aim to protect debtors and ensure they have sufficient funds to cover living expenses. However, the fact remains that a wage garnishment could continue until the debt is paid off. It will follow you unless and until you legally remove it. Bankruptcy is a solution that will eliminate wage garnishment through one important feature, which is the automatic stay in Chapter 7 and Chapter 13 cases.

 

The automatic stay plays a powerful role in stopping many types of creditor efforts to collect, making it one of the key benefits of bankruptcy. It is important to discuss your situation with a Georgia wage garnishment lawyer, but an overview about the laws is informative. 

Overview of Wage Garnishments

A wage garnishment is an order directed at your employer, instructing the company to withdraw a certain amount from your pay and forward it to satisfy debt to creditors. There is a specific process for wage garnishment in Georgia, since creditors must go through the proper steps to get the garnishment order. In most cases, a creditor must first get a judgment against you for the amount of the debt. Typically, this would occur through a collection lawsuit in which the creditor sues to get payment. 

 

However, there are some cases in which the creditor does not need to go through the whole litigation process. It is possible to get a wage garnishment order without filing a lawsuit for:

 

• Student loan debt;
• Certain types of taxes;
• Alimony; and,
• Child support.

 

A creditor cannot the entire amount of your pay with a wage garnishment order. The rules work as follows:

 

• A creditor can take up to 25 percent of your disposable income for a week OR the amount of your wages above $217.50.
• If your debt involves student loans, the maximum garnishment amount is 15 percent of your wages.
• The definition of disposable earnings is your wages minus the mandatory deductions taken by your employer for taxes and insurance.

The Automatic Stay in Bankruptcy

Because wage garnishment is an order for your employer to divert your pay, you need some legal authority to remove it. To stop amounts from being taken out of your income, filing a bankruptcy petition is an immediate solution. There are two types of bankruptcy available to individuals and married couples, including Chapter 7 and Chapter 13. With both, the automatic stay is a powerful order from the US bankruptcy court. The same day you file your petition, creditors are prohibited from taking any action to pursue your debt. A wage garnishment is included in the list of legal proceedings that you can stop through the automatic stay. Creditors are also forbidden from:

 

• Suing in court in a collection lawsuit to recover debt;
• Placing a lien on property;
• Attaching your bank accounts;
• Repossessing your vehicle; and,
• Initiating or continuing foreclosure proceedings on your home, subject to some exceptions.

Remove Wage Garnishment Through Chapter 7

Now that you understand how the automatic stay works, it is necessary to determine what type of bankruptcy is the right solution for you. Chapter 7 is a process by which you can discharge debt if you qualify. The eligibility rules focus on your income, therefore:

 

1. You can file Chapter 7 if your income is below the state median income level for a household of your size. 
2. If your income is higher, you may still qualify under the Means Test that reviews your monthly expenses in light of your earnings.

 

With Chapter 7, you can cease any wage garnishment upon filing. Then, when your qualifying debts are eliminated, you will no longer owe creditors. Still, you should note that Chapter 7 includes liquidation. The bankruptcy trustee has the power to sell your assets to satisfy debt to creditors. You can take advantage of exemptions to protect real estate and personal property. 

Garnishments in Chapter 13

There are two important goals you can accomplish with Chapter 13, including removal of wage garnishments. The automatic stay will cease these efforts upon filing. The second is that you can discharge qualifying debts when you go through the Chapter 13 bankruptcy process. Instead of liquidation as with Chapter 7, you pay creditors through a debt repayment plan. Your debts are reorganized, reduced, and combined into an amount you can afford to pay monthly. Additional points about Chapter 13 are helpful:

 

• The criteria to qualify are relaxed compared to Chapter 7. To qualify for Chapter 13, you must have a job, earning the income to pay your debt repayment plan.
• Through the debt repayment plan, you will likely end up paying far less than what you owe to creditors.
• For 3 to 5 years, you make monthly payments to creditors. When you complete your debt repayment plan, your case concludes and you emerge debt-free.

Comparing Types of Debt

It is important to realize that you can only discharge qualifying debt through bankruptcy. In most cases, you will only be eliminating unsecured debt, such as credit cards, medical debt, lines of credit, and personal loans. By extension, you can only remove wage garnishments that are related to these debts. You cannot cease a garnishment related to a debt that is not dischargeable, such as those for child support, alimony, and taxes. You may be able to delay these through the automatic stay, but they will not go away.

 

Likewise, you cannot wipe out secured debts. These are debts in which you pledged an asset as collateral, such as your home. The automatic stay will delay foreclosure efforts with Chapter 7 and Chapter 13. However, a lender can file a motion to have the court lift the stay for purposes of your home loan.

 

Other Benefits with Bankruptcy

Besides stopping a wage garnishment, there is a wide array of advantages to filing Chapter 7 or Chapter 13. At the end of your case, you will no longer be crushed by debt and fearing legal action by creditors. You can begin rebuilding your credit right away, even while your case is pending. An example is paying your mortgage, which reflects positively on your credit report.

 

In the long run, bankruptcy is a benefit for your financial future. When the time is right, you can obtain a secured loan in which you deposit funds as collateral to pay your bills. You will open the door to many new financial opportunities as you boost your credit score. If you were to attempt to pay down your debt without the protections of bankruptcy, it could take decades for you to get ahead.

Additional Wage Garnishment and Bankruptcy Rules to Know

There are some points about Georgia wage garnishments and bankruptcy cases that you should bear in mind when considering your options.

 

• You can file Chapter 13 if you do not qualify under Chapter 7 rules, but you might opt for Chapter 13 regardless. Your assets are not liquidated in Chapter 13.
• Though a wage garnishment may take your pay, you will not lose your retirement savings with bankruptcy. All retirement plans covered by ERISA are exempt.
• If you receive child support, these amounts cannot be diverted through garnishment or other creditor efforts to collect debt.
• Unemployment compensation, Social Security disability and retirement benefits, and workers’ compensation are not subject to wage garnishment. 
• Your wages cannot be garnished if your income is less than 30 times the federal minimum wage.

Timeline of a Bankruptcy Case

An initial consideration with bankruptcy to remove wage garnishments is which type to file, with Chapter 7 and Chapter 13 each offering advantages. Your Georgia bankruptcy lawyer will advise you and help with all requirements before filing your petition. For instance, you need to complete a credit counseling course within 180 days prior to starting a bankruptcy case. Your attorney can also assist by:

 

• Organizing your financial documents, including paperwork on your assets, income, expenses, and debts;
• Preparing the bankruptcy petition for Chapter 7 or Chapter 13, along with all schedules;
• Developing and filing your debt repayment plan for a Chapter 13 case;
• Attending the 341(a) meeting of creditors, which you are required to attend along with your bankruptcy attorney; and,
• Finalizing all tasks and obtaining the final bankruptcy discharge order from the court.

 

In addition, a lawyer can also advocate for you during wage garnishment proceedings if you do not opt for bankruptcy. It is important to have legal representation to ensure creditors and employers do not abuse the process or take more than allowed by wage garnishment laws.

Set Up a Consultation with a Georgia Wage Garnishment Attorney

Bankruptcy may be a wise solution if you can to remove wage garnishments in Georgia, but there are many factors to consider before making the move. To learn more about your options with Chapter 7 and Chapter 13,  please contact Morgan & Morgan, Attorneys at Law, P.C. We can set up a free consultation to discuss details at our offices in Athens, GA. After reviewing your case, a Georgia bankruptcy lawyer will advise you on what to expect.