Creditors have various options for pursuing debtors, and their efforts go beyond making threatening phone calls and demanding payment. By going through the proper legal steps, they can even take your wages under certain circumstances. The concept is termed wage garnishment, and it might seem unfair to take your hard-earned income before it makes it into your hands. However, this is exactly how wage garnishment works. If you have concerns about creditor actions to collect your debt, there is much you need to know about wage garnishment laws in Georgia.

There are many strict rules about how creditors obtain wage garnishment rules, and they generally favor debtors who are struggling to pay bills. Still, your income could be diverted when a creditor meets all requirements. Your options to remove a wage garnishment are extremely limited, but you can terminate the creditor’s actions immediately by filing for bankruptcy.

 

Filing for Chapter 7 or Chapter 13 will cease all creditor efforts to collect on a debt, including wage garnishment. There are additional benefits as well, and a Georgia wage garnishment attorney can explain them in more detail. Plus, you can review some background information about bankruptcy to help understand your options for dealing with a wage garnishment.

What is Wage Garnishment?

Creditors have access to many different legal remedies when they are seeking to collect a debt from you, and garnishing your wages is one option they use to get paid back. A wage garnishment is not the first stage of the legal process, but your income could be diverted to a creditor when the requirements are met. There are limitations on the amount. The Federal consumer protection statute on wage garnishment states that a creditor cannot take more than:

 

• 25 percent of your disposable earnings; or,
• The amount that your disposable earnings are more than the federal minimum wage multiplied by 30, which is $217.50.

 

Your disposable earnings are your take-home pay after mandatory deductions for taxes and other payroll purposes. If this amount is less than $217.50, a creditor is prohibited from garnishing your wages. In addition, there are some sources of income that cannot be garnished, including:

 

• Social Security retirement;
• Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI);
• Unemployment compensation;
• Child support you receive;
• Veterans’ Administration benefits; and,
• Welfare benefits.

Process for Wage Garnishment

A creditor cannot take your earnings without going through the proper legal channels, and typically the first stage will be a collection lawsuit. The creditor must sue in court and obtain a judgment in its favor, listing you as the individual obligated to pay. The judgment alone does not result in payment to the creditor, however. The creditor must use enforcement efforts to get paid, and wage garnishment is one of the ways to enforce.

 

The process for wage garnishment is termed wage attachment in Georgia. After obtaining a judgment in the debt collection lawsuit, the creditor can use this order to initiate the case. When a creditor meets all the legal requirements, the judge will approve the wage garnishment. However, you should note that the direct parties to the case are the creditor and your employer. This is because your employer holds the key to your wages until paid to you, and the creditor wants access to these earnings before you receive them.

 

Note that some creditors do not need to go through an official lawsuit to get a wage garnishment. Your earnings could be attached if you owe debt on taxes, child support, alimony, or student loans. 

Options to Get Rid of Wage Garnishment

One way to eliminate a wage garnishment is to show some flaw in the facts or the process. It is important to discuss your situation with a Georgia wage garnishment lawyer if you have reason to fight the case due to the following:

 

• The judgment underlying the debt was not proper, such as where you did not receive service of process.
• The creditor engaged in unlawful debt collection practices.
• The creditor attempts to attach more of your earnings than legally allowed.

 

However, as far as options to eliminate a legal wage attachment, bankruptcy may be a solution. Upon filing your petition for bankruptcy, the automatic stay in bankruptcy goes into effect. Creditors are prohibited from engaging in any efforts to collect your debt, so they cannot garnish your wages. Plus, they cannot sue in a debt collection lawsuit that might wind up becoming a wage attachment. The automatic stay applies to both Chapter 7 and Chapter 13 cases, and it starts the same day you file.

Basics of Chapter 7 Bankruptcy

There are two bankruptcy options that are common among individuals and married couples, and one is Chapter 7. With this type, you can discharge all qualifying debt if you meet the strict eligibility criteria:

 

1. You make less in wages than the state median income level, as applicable to a household of your size; or,
2. Your wages are higher, but you meet the Means Test that takes into account your monthly bills along with income.

 

At the end of a Chapter 7 case, you emerge debt-free and creditors can no longer garnish your wages. However, there is a liquidation element of Chapter 7. The bankruptcy trustee has the power to sell your assets to pay your debt to creditors. In practice, the trustee may not choose to liquidate if it would not be productive to sell your property for a profit.

How Chapter 13 Bankruptcy Works

If you do not meet the criteria of Chapter 7, you must file for Chapter 13. The eligibility rules are relaxed, so it is only necessary that you have a job and earn an income to qualify. In addition, you might opt for Chapter 13 if you have significant assets to protect. With this type of bankruptcy, there is no liquidation of property.

 

Instead of liquidation, Chapter 13 aims to pay back your creditors through a debt repayment plan. First, your debts are restructured and reduced into a single payment amount that you pay monthly. This will be a plan you can afford based upon your income, which is why you must be employed. You will complete the terms of the debt repayment over 3 to 5 years, at which point your debts are discharged. It is likely that you will end up paying far less than the total amount you owe to creditors. Due to the automatic stay and being debt-free, wage garnishments stop.

Factors When Considering Bankruptcy 

Filing for bankruptcy is a momentous decision, so you can use some tips on the factors to review as you weigh your options. You must first decide if bankruptcy is the right solution for you as a whole, and also in the context of potential for wage attachment. Plus, you will need to review whether Chapter 7 or Chapter 13 works best for achieving your goals. Guidance from a Georgia bankruptcy lawyer is crucial for making informed decisions about your future and financial outlook.

 

Some additional recommendations as you consider bankruptcy include:

 

• Carefully review your finances, including assets, income, debts, and expenses.
• Assess how long it would take to pay your bills in full without bankruptcy. 
• Look into credit counseling courses that are approved by the bankruptcy court, as you will need to take one within 180 days before filing bankruptcy.
• Continue to pay your mortgage if possible. You can protect your home if you stay current, and you can even discharge arrearages in Chapter 13 bankruptcy.

Additional Notes on Chapter 7 and Chapter 13

It is important to realize that bankruptcy is intended to discharge unsecured debts, such as credit cards, personal loans, lines of credit, and medical debt. You cannot eliminate secured debt, including your mortgage. While you can take advantage of the automatic stay to stop most creditor efforts to collect, a lender can request that the court lift the stay and allow it to proceed with foreclosure. The bank can move to sell collateral for the mortgage, which is the secured interest in your home.

 

In addition, there are some debts that are not dischargeable by US or Georgia law. For instance, with both Chapter 7 and Chapter 13, you cannot get rid of debt for alimony, child support, penalties and fees to the government, and some types of taxes.

Legal Help with Bankruptcy

While it is important to get advice and counsel from a Georgia bankruptcy attorney when making decisions on bankruptcy, you will also need guidance with the process. You can count on your lawyer to tackle all essential tasks throughout your case, including:

 

• Reviewing and organizing your financial paperwork;
• Preparing the bankruptcy petition and all relevant schedules:
• Filing your petition, along with filing fees of $338 for Chapter 7 and $313 for Chapter 13;
• Helping you develop the proposed Chapter 13 debt repayment plan, which must be submitted to the court early in the bankruptcy process;
• Attending the 341(a) creditors meeting with you, where creditors will ask questions and confirm the information on your bankruptcy petition; and,
• Finalizing your case and obtaining the discharge order.

Trust a Georgia Wage Garnishment Lawyer to Assist with Your Case

It is helpful to review the basics, but there is much more to know about wage garnishment laws in Georgia. While your options may be limited for removing the order, bankruptcy may be a suitable solution to terminate it. Morgan & Morgan, Attorneys at Law, P.C. can assist with your Chapter 7 or Chapter 13 case, so please contact our Georgia bankruptcy law firm today. We can set up a free consultation at our offices in Athens, GA to discuss details.