Wage garnishment laws vary by state. Georgia allows for wage garnishments in a variety of instances. For an individual who is struggling financially, realizing their paycheck is going to be much lower because of a garnishment can be devastating. Fortunately, filing bankruptcy stops wage garnishments. In some cases, contacting a Georgia bankruptcy attorney as soon as you discover a creditor may be about to garnish your wages can prevent the garnishment altogether.
Who Can Garnish My Income in Georgia?
Government agencies such as the Internal Revenue Service and the Georgia Department of Revenue can garnish wages for back taxes without a court order. Georgia also pursues child support arrearage aggressively through wage garnishments. Other creditors may garnish wages by filing a debt collection lawsuit and obtaining a judgment followed by an order of garnishment. Wage garnishments can result in the loss of substantial income each pay period until the debt is paid in full.
Bankruptcy Stops Wage Garnishments Immediately
When an individual files for bankruptcy relief, the automatic stay provisions of the Bankruptcy Code prohibit creditors from taking further action to collect a debt without court approval, including wage garnishments. A creditor should stop wage garnishments when presented with a notice of a bankruptcy filing. Continuing with a garnishment after being notified of the bankruptcy action without bankruptcy court approval may result in sanctions by the court.
Even though filing bankruptcy may stop the wage garnishment, it may only stop the garnishment temporarily. Depending on the type of debt and the chapter of bankruptcy filed, a creditor could resume garnishing your wages by obtaining court approval or after your bankruptcy case is complete.
Wage Garnishments for Non-Dischargeable Debts
Some debts are not eligible for discharge in bankruptcy. Student loans, most taxes, child support, alimony, court-ordered restitution, and most amounts owed to government agencies are non-dischargeable debts. Non-dischargeable debts survive the bankruptcy filing. Therefore, if you file under Chapter 7, the wage garnishments may continue after your bankruptcy case is dismissed.
However, if you file under Chapter 13, you can prevent wage garnishments by proposing a repayment plan. The bankruptcy plan can spread out the payments over 60 months so that you can repay the debts at an affordable rate. Through your Chapter 13 plan, you can also eliminate other unsecured debts for a percentage of what you owe on each account.
Wage Garnishments for Dischargeable Debts
Most unsecured debts are dischargeable. Examples of unsecured debts include some old tax debt, credit cards, medical bills, personal loans, old utility bills, and most personal judgments. If a debt is eligible for discharge, the wage garnishment stops, and the debt is discharged when you complete your bankruptcy case. Creditors cannot resume wage garnishments for discharged debts.
Seeking Assistance from a Georgia Bankruptcy Attorney
Stopping the wage garnishment before it begins is the best option. You keep the money you need to provide for your family. Therefore, if you receive notice of a lien or a debt collection lawsuit, it is best to contact one of our Georgia bankruptcy attorneys as soon as possible to discuss bankruptcy options. You may have more options available to you to get rid of debt and stop garnishments than you realize. Your first step is learning about your options from an experienced bankruptcy lawyer.
Posted in: Bankruptcy