Keith Mack
Wage garnishment is a legal process where a portion of an individual’s earnings is withheld by their employer to repay a debt, usually due to a court order or government mandate. This can be stopped by negotiating a repayment plan and making the first payment within 30 days of receiving the notice. One can also request a payment plan by filing a Motion for Installment Payments. If a payment plan is ordered by the court, the wage garnishment will stop. However, if one fails to make the payments, the creditor may file to garnish the pay again. To stop a wage garnishment, one can also file for bankruptcy.
| Characteristics | Values |
|---|---|
| Definition of Garnishment | A notice to someone holding your money (an employer, a bank) requiring them to take money from your pay or your account and pay it to the person you owe. |
| Types of Garnishments | Wage garnishment and non-wage garnishment. |
| Wage Garnishment | The process of garnishing a paycheck. |
| Non-Wage Garnishments | Lump sum garnishments, including attachments of money held in a bank account or state income tax refunds. |
| Wage Garnishment Limit | Up to 25% of your wages. |
| Child Support Wage Garnishment Limit | Up to 50% of your pay, 60% if past due child support is also being collected. |
| Social Security Retirement Garnishment Limit | Up to 15% of your Social Security retirement, but at no time can they leave you with less than $750 a month ($9,000 a year). |
| Federal Student Loan Wage Garnishment Limit | Up to 15% of your disposable income, but they must leave you with at least 30 times the federal minimum wage, currently set at $7.25 per hour, ensuring you retain a minimum of $217.50 per week. |
| Objection to Garnishment | You have 14 days to object by filing an Objection to Garnishment with the court. |
| Request a Payment Plan | You can request a payment plan (Order for Installment Payments) to stop a wage garnishment. |
| Request a Hearing | You can request a hearing within 30 days from the date on your notice. |
| Proving Debt in Error | You can go to the courthouse to prove that the debt was in error, missing information, or that your money is exempt from garnishment. |
| Negotiate a Settlement | You can negotiate a settlement of your judgment. |
| File Motion to Pay in Installments | You can file a motion to pay the judgment in installments (limited civil cases only—under $35,000). |
| File for Bankruptcy | Filing for bankruptcy can stop a wage garnishment. |
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What You'll Learn
File for bankruptcy
If you're facing wage garnishment, bankruptcy may be an option to regain control of your finances. Filing for bankruptcy can stop most wage garnishments and prevent creditors from seeking new garnishment orders. This is known as an "automatic stay", which is an automatic injunction that comes into effect when you file for bankruptcy, regardless of the type of bankruptcy. It gives you breathing room while your bankruptcy case is in progress.
However, bankruptcy is a complex legal process with strict requirements, and some types of debt are exempt from being discharged, so it's best to get legal advice. A bankruptcy attorney can provide critical advice on which type of bankruptcy to file for and which of your debts may be dischargeable.
It's important to note that bankruptcy isn't the only way to stop wage garnishment. You can also try to negotiate with your creditor, settle the debt, or petition the court to reduce the garnishment amount based on economic hardship.
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Negotiate a settlement
If you want to stop your wages from being garnished, you must file for bankruptcy. However, this is not the only alternative. You can also negotiate a settlement with your creditor.
If a creditor has already gone to court and obtained a garnishee summons, you can attempt to make a deal with them. You can call the creditor or their lawyer and offer to make a settlement. You could agree to pay the balance and provide post-dated cheques to repay the debt. The creditor may agree to alternate payment arrangements, but they are unlikely to agree to stop the garnishment once a garnishee summons has been ordered.
You can also try to negotiate directly with the creditor to make a deal. However, they may not agree to this type of deal as they are already receiving money from your employer.
In Canada and the US, a consumer proposal can be used to stop a standard wage garnishment. A consumer proposal is a formal debt settlement process that provides a stay of proceedings, which stops most garnishments. A creditor can vote against a proposal, but in most cases, a resolution can be reached that works for all parties.
If you qualify as a head of household, you may legally stop a wage garnishment under Florida law. A head of household pays at least 50% of the living expenses for a child or other dependent. Additionally, certain types of income are exempt from wage garnishments, such as retirement benefits, veteran's benefits, disability benefits, workers' compensation, alimony, and child support.
If you were not properly notified of the original lawsuit (for example, if the notice was sent to the wrong address), you may have a defence. You can also prove that the debt was in error, missing information, or that your money is exempt from garnishment.
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File a motion to pay in instalments
If you are unable to pay the full amount of a court-ordered debt, you can apply for an instalment order, allowing you to pay off the debt in smaller amounts over time. To do this, you must complete a Form 61A – Application to Registrar for Order for Payment of Judgement Debt by Instalments. This form must include:
- The total amount of money that still needs to be paid.
- The 'grounds' for the application, including why you are applying and why you cannot pay the debt in full.
- Your address and the address of the person or company to whom you owe money.
- A Form 72C – Affidavit of Financial Circumstances, which outlines your income, property, assets, debts, liabilities, and other financial obligations. This must be signed in the presence of an authorised affidavit taker, such as a lawyer or justice of the peace (JP).
Once you have completed the form, you must submit it to the Local Court. There is no filing fee for this. The registrar will then assess your financial situation to determine whether you can realistically afford the offered instalments and whether your payments will be sufficient to cover the debt and interest within a reasonable timeframe. If your instalment application is accepted, the court will notify the other party.
It is important to note that defaulting on instalments can result in serious consequences, including the possibility of imprisonment for up to 40 days if you can afford the payments but consistently fail to make them. Therefore, it is recommended to seek financial counselling to determine a feasible instalment amount and ensure you can comply with the terms of the instalment order.
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Request a payment plan
Wage garnishment is when a debt collector uses the court to take your money away from you. This can only occur after a judgement has been obtained in court. If your wages are being garnished, a judgement already exists, and you may have a lien that needs to be addressed.
To stop a wage garnishment, you can request a payment plan, also known as an Order for Installment Payments. You must ask the court for a payment plan by filing a Motion for Installment Payments. If a payment plan is ordered by the court, the wage garnishment will stop. However, you must make the payments required by the payment plan, or the creditor may file to garnish your pay again.
You can also stop a wage garnishment by paying off the debt, working with your creditor, challenging it, filing an exemption, or filing for bankruptcy. If you file for bankruptcy, you may be able to get on a restructured payment plan that works with your financial situation.
If you disagree with the judgement, for example, if they say they served you papers at an address you no longer lived at, you should take this to a civil law attorney general practitioner to review and get advice before acting.
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Prove debt in error or money exempt from garnishment
If you want to stop a wage garnishment, you need to file for bankruptcy. However, there are other ways to prove that your debt is in error or that your money is exempt from garnishment.
Firstly, it's important to understand the garnishment process. Garnishment is when a debt collector uses the court to take your money. A garnishment can only occur after a judgement has been obtained in court. There are two types of garnishments: wage garnishment and non-wage garnishment. In the former, a creditor asks a judge to sign an order requiring your employer to give the creditor a part of your paycheck. In the latter, a creditor files a separate case against a third party (usually your bank or employer) who has your money, and asks the court to issue a writ of garnishment.
If you want to prove that your debt is in error or that your money is exempt, you must first fill out a Protected Property Claim Form and turn it in to the court. You can also keep a separate account for any exempt funds, such as Social Security, so that it is easier to prove that the account only contains exempt funds. If your exempt funds are mixed with nonexempt funds, you will have to prove to the court that the frozen funds came from exempt sources, which is a more complex process.
If your wages are being garnished, you can ask the judge to reduce the amount of deduction from your paycheck, or you can negotiate a settlement of your judgement or file a motion to pay the judgement in instalments. If you disagree with the judgement, for example, if you were served at an address you no longer live at, you should take this to a civil law attorney general practitioner to review and get advice before acting.
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Frequently asked questions
Garnishment is when a debt collector uses the court to take your money away from you. A garnishment can only occur after a Judgement has been made in Court.
You can request a payment plan or file for bankruptcy. You can also negotiate a settlement or repayment plan.
You will receive a Notice of Garnishment. You can also check with the Clerk of the District Court in the County.
Wage garnishment is when a portion of an individual’s earnings is withheld by their employer to repay a debt. Non-wage garnishments are lump-sum garnishments, including attachments of money held in a bank account or state income tax refunds.
Generally, by law, you are entitled to 75% of your earnings regardless of claims by creditors. However, this amount can vary depending on the type of debt and local laws.
