Your paycheck already stretches too thin. The last thing you need is having even less money to take home. That is what will happen if one or more of your creditors decide to garnish your wages. It can be devastating to receive a notice that a creditor is taking steps to get the court’s permission for wage garnishments, and you may think you have no option but to let it happen.
However, you do have options. To avoid having your wages garnished, your first step will be learning as much as you can about the process and the methods of debt relief available to you.
How will garnishment affect me?
When you face a mountain of debt, it may seem very lonely. Everyone around you seems to go on with their happy lives while you struggle alone with your finances. What you may not realize is that about 10 percent of workers between 35 and 44 have their wages garnished each year, mostly due to credit card debt, student loans, child support and taxes.
Wage garnishment forces your employer to withhold a portion of your paycheck and send it to your creditor until you have paid what you owe. The amount of money a creditor can demand depends on the kind of debt you owe, for example:
- Most consumer creditors, including for credit cards and medical debt, can seek a court order to take up to 25 percent of your disposable income.
- The Internal Revenue Service can garnish 15 percent of your wages, but they do not need to seek a court order to do so.
- If you owe child support or alimony, authorities can garnish up to 60 percent of your wages depending on the circumstances, and even more if you have gone more than 12 weeks without paying.
- If you are in default for student loans, your wages may see a 15 percent garnishment, again, with no court order necessary.
Once you receive notice that your wages are in danger of garnishment, you have no time to lose in seeking assistance. There are steps you can take to suspend or stop the garnishment, including obtaining the protection of bankruptcy.
While bankruptcy usually does not include debt you owe for child support or student loans, it may help alleviate other financial pressures, potentially freeing up money to make those support and loan payments. Additionally, there may be other options that better suit your personal circumstances. A skilled and compassionate Wisconsin attorney can evaluate your situation and guide you in choosing the most appropriate method of debt relief for you.