Wage Garnishment for Consumer Debts
If you’re behind on your bills, you’ve probably received a lot of threatening phone calls or letters from debt collectors. These creditors may have threatened to start garnishing your wages if you don’t pay everything they claim that you owe, leaving you wondering, “can they do that?” Read on to learn about when and how a debt collector can garnish your wages and what you can do to stop it.
Wage garnishment is when a portion of your paycheck is deducted by your employer before you receive it, with the deducted portion sent directly to your creditor. Collectors of a consumer debt, such as medical bills or credit card debt, cannot start to garnish your wages until they obtain a judgment against you (different rules apply to unpaid taxes, child support, or student debts). This means that the creditor has to file – and win – a lawsuit against you in court based on the debt it claims you owe. The creditor will need to serve you with a copy of the lawsuit, after which you will have time to respond to their claims. If you agree that you owe the debt, then the court will soon enter a judgment against you. The creditor will use that judgment to get the court’s permission to begin garnishing your wages. If you don’t agree that you owe the amount the creditor claims you owe, you can fight the lawsuit. If you do choose to deny the debt, you should consider hiring an attorney to represent you in court because disproving the amount of a debt can be complicated.
If the creditor is successful in obtaining a judgment and an order allowing it to garnish your pay, there are additional limits on how much of your pay the creditor can take. In Alabama, a creditor may not take more than 25% of your disposable earnings (your pay after making legally-required deductions), or 30 times the hourly minimum wage, whichever amount is smaller. For example, let’s say you make $1000 a week in disposable earnings. 25% of that would be $250, and the minimum wage ($7.25) times 30 would be $217.50. Your wages could be garnished in the amount of $217.50 each week. Keep in mind that, when the automatic stay provision is in effect during bankruptcy, your wages can’t be garnished, and any lawsuits filed against you by creditors will be suspended.
If you are facing mounting credit card or medical debt in Alabama and need legal help, contact the compassionate, experienced, and dedicated Montgomery bankruptcy lawyers at the Dansby Law Firm for a consultation, at 334-834-7001.