The short answer is Yes. Wage garnishment bankruptcy in Utica, NY, may be something you are considering if you are in a tight financial situation. Wage garnishment can come with serious repercussions, so you want to act quickly if you have been considering bankruptcy as a good way of handling your outstanding debts.
At Grady BK, PLLC, we approach our clients with the goal of providing straightforward legal guidance that provides clarity and peace of mind. We treat each of our clients as though they were our only client, ensuring we understand their unique situation and financial goals. In this article, we will be discussing how to approach wage garnishment and bankruptcy in Utica, NY, and whether or not bankruptcy can protect you from wage garnishment.
When Can Wage Garnishment Happen?
Wage garnishment is a process that the court can order if you have debts that you have not kept up with. A creditor can request wage garnishment through your employer, requiring them to withhold a certain portion of your wages to pay your outstanding debt.
The most common wage garnishment is when a creditor has sued you and taken a judgment (judgment creditors). With that judgment the creditor can garnish your wages. The creditor will continue to get interest on the judgment. There are also fees that are assessed to the debt that you must pay. A wage garnishment can also occur if you owe back taxes, unpaid student loans, or have court-ordered child support and/or alimony.
According to wage garnishment laws in New York, judgment creditors have the ability to take up to 10% of your gross wages. This is before any taxes or any other deductions. However, if your disposable income is less than 30 times the state or federal minimum wage, creditors will not be able to garnish your wages.
How the Automatic Stay Stops Wage Garnishment
When you file for bankruptcy, no matter the type of bankruptcy, an automatic stay immediately takes affect. The automatic stay provides protection from your creditors, prohibiting them from making any collection efforts while the automatic stay is in effect. As long as everything proceeds smoothly, the automatic stay will remain in effect until your bankruptcy case is closed.
So, when you file for bankruptcy, the automatic stay will put a stop to judgment creditor wage garnishment that has already begun (it will also stop one that is about to start). Keep in mind that your employer and creditors may not be notified of this immediately, so there may be a slight delay.
Also, the automatic state does not protect you from all types of wage garnishment. Wage garnishment for things like alimony, support obligations, and child support will continue even after you have filed for bankruptcy.
Chapter 7 vs. Chapter 13 for Garnishment
For the most part, Chapter 7 and Chapter 13 bankruptcy treat wage garnishment in much the same way. Both types of bankruptcy have an automatic stay, which will put a stop to wage garnishment efforts either indefinitely or temporarily.
Not only can you stop judgment creditor wage garnishment with a bankruptcy in NY, but you may also be able to get some of your garnished wages back if they were taken after the bankruptcy was filed. This typically happens when payroll has already been processed by the time the bankruptcy is filed. This is something that will be dependent on each individual situation, which is why you should consult with a bankruptcy lawyer in Utica, NY.
FAQ:
How quickly does garnishment stop after I file for bankruptcy?
Wage garnishment will stop once the creditor has been notified. Ideally, this would happen immediately, but there may be a slight delay in some cases. But you should be able to get any garnished wages back that were collected after the automatic stay was in place.
Can I include multiple garnishments in my filing?
Yes, you can include all qualifying debts when you file for bankruptcy.
Utica’s Top Compassionate Bankruptcy Attorney
Navigating wage garnishment and bankruptcy in Utica, NY, can be very confusing and stressful if you don’t know what to expect. At Grady BK, PLLC, we are here to help you whether you want to prevent wage garnishment or want to file for bankruptcy after wage garnishment has already begun. We will work with you one-on-one to come up with the best strategy so that you can move forward with confidence toward your financial goals.
At Grady BK, PLLC, we understand that the bankruptcy process can be confusing, which is why we offer straightforward and clear legal guidance and representation. We will be with you every step of the way, answering any questions or concerns you may have.
Contact us today at 315-299-9005 to discuss your situation with a bankruptcy lawyer in Utica, NY. Our team at Grady BK, PLLC, is here to help you move forward, whether you have already decided on bankruptcy or need help coming to a decision.
