Stop Garnishment

How much of my check can be garnished?

Published on: August 29, 2018 | Rachel Coxwell

You have just learned that one of your creditors is starting to take money out of your paycheck or even your bank account. This is called a garnishment. A garnishment is a legal procedure where a portion of your paycheck is taken for the payment of a debt. Garnishments are usually by a creditor that has a court order. Some government agencies can garnish your paycheck without a court order, for debts such as back taxes and student loans. Federal laws limit the amount that a person’s paycheck may be garnished. A garnishment applies to wages, salaries, commissions and bonuses.

The amount of pay subject to garnishment is based on your “disposable earnings,” which is the amount left after legally required deductions are made. Legally required deductions are federal, state, and local taxes, the employee’s share of social security, Medicare, State unemployment, and required employee retirement. Federal law sets the maximum amount that may be garnished in any workweek or pay period regardless of the number of garnishment orders received by the employer. Garnishments may not exceed 25% of the employee’s disposable earnings, or the amount by which an employee’s disposable earnings are greater than 30 times the federal minimum wage (currently $7.25 an hour).

If the pay period is weekly and disposable earnings are $217.50 ($7.25 x 30) or less, there can be no garnishment.
If weekly disposable earnings are more than $217.50 but less than $290.00 ($7.25 x 40), the amount above $217.50 can be garnished ($72.50).
If the weekly disposable earnings are $290 or more, no more than 25% can be garnished.

There are exceptions to the garnishment limits. The limitations to wage garnishments do not apply to certain bankruptcy court orders or to debts due for federal or state taxes. If a specific state has a different wage garnishment law from Title III, then the law resulting in the lower amount of earnings being taken must be used. Debts that are not related to taxes, but are owed to other federal agencies can be garnished up to 15% of disposable earnings to repay defaulted debts owed to the US government. The Higher Education Act authorizes the Department of Education’s guaranty agencies to garnish up to 10% of disposable earnings to repay defaulted federal student loans.

See chart below for different pay periods regarding garnishments:

Can I get back wages that were garnished if I file bankruptcy?

Published on: November 14, 2016 | Frank Coxwell

Yes! You can get back money that was garnished from your wages (if the debt is dischargeable) if you file bankruptcy. In Mississippi, you can only recover garnished wages were taken within 90 days of your filing for bankruptcy and the amount taken was more than $600. You are not entitled to recover everything that’s been garnished if you’ve been garnished more than 90 days before you file bankruptcy; just the 90 day portion they took right before you filed bankruptcy. ***Keep in mind that filing bankruptcy STOPS a garnishment the moment the case is filed!

Depending on which kind of bankruptcy case you file and the amount, the money may go back to you or it may go to the Trustee. But either way, it’s beneficial to you. How would it be beneficial for it to go to the Trustee? Keep reading. I’ll explain!

Example #1: You have been garnished for the past 2 months for a total of $800 and you file a Chapter 7 bankruptcy tomorrow. The first two criteria are met (within 90 days and over $600) so you stand to regain all $800.

Example #2: You have been getting garnished for 6 months for a total of $1,500 and you file a Chapter 7 bankruptcy tomorrow. You’re qualifying but only the portion taken within 90 days will be eligible – which lets say totals $700. The creditor is entitled to keep the other portion ($800).

Are Debt Collectors Calling You?

Published on: September 12, 2015 | Frank Coxwell

If you are getting debt collection calls you are not alone. About one in seven people in Mississippi is being hounded by a debt collector. Buying debt and debt collection is a billion dollar business and becoming a larger, more complex industry. The original creditor sells their debt to a debt collector, and often they sell the same debt multiple times meaning that multiple debt collection companies are attempting to collect the same debt! Debt collectors often attempt to collect from the wrong person, overstate or inflate the amount owed by adding collection fees, and even attempt to collect debts that are not real (may have been paid in the past or was never a debt to begin with).
Along with these abuses, details of the original debt are lost or outdated. Creditors selling debt are basically selling lists that have contact information and amounts owed – and little more than that in way of details. Collectors then may have a mixture of valid debts, debts that have been since settled, or debts that are past the statute of limitations and can no longer be collected. It’s not clear exactly how many consumers are wrongly harassed for accounts that are not their debt. Debts purchased by the large debt-buying firms have no documents, contracts or other proof of the debt. Your debt will be sold to a debt collector for pennies on the dollar. It’s not just the original credit that sells debt. Debt collection companies then may sell the lists they have purchased to other debt collectors, who may then sell it to another, then another, and another. It’s not uncommon for people to all of a sudden be receiving debt collection calls and letters about something that happened years ago but now, the debt has shown up on a list that has been sold to another company, and here we go again. Continue Reading ›

What if I get served with Court papers?

Published on: September 25, 2014 | Frank Coxwell

If you get served with court papers, you are being sued by someone (person or business entity). For the sake of this discussion, let’s say you are being sued by a creditor over a debt you did not pay (or they say you did not pay). If you don’t show up for court, the debt collector wins, right or wrong – they win and get a judgment is set against you. With a judgment in place, the debt collector has the power to garnish your wages or seize your bank account, or any bank account with your name on it.

They can sue you and garnish your wages even if they have already repossessed their collateral (such as a car, furniture, guns, etc). They can sue you and garnish your wages even if they have foreclosed on your home if they say that there is a delinquency (the sale of the home, car, furniture, guns, etc) did not cover the entire balance you owed the creditor.

Don’t avoid being served. The 14th Amendment to the US Constitution mandates “due process” when someone is asserting a claim against a person’s “life, liberty or property.” State Constitutions have also adopted this right and passed what is called “service of process” laws that spell out how a legal document must be delivered to a defendant in a lawsuit. Don’t make the mistake of thinking that avoiding being served will avoid the consequences of being sued. It is just not true. Avoiding being served does not make the case disappear and avoiding being served could make things worse.

What is a wage garnishment?

Published on: September 11, 2014 | Frank Coxwell

A garnishment is an order from a court that is sent to your employer requiring them to withhold certain amount of money from your paycheck. This money is then sent to the creditor. Mississippi law limits the amount of money that your creditors can take from your wages to 25%. Most creditors are limited to the 25%, but some creditors like the IRS, State Taxes and Child Support are allowed to get more.

What Is The Process For Getting A Garnishment?

1. A creditor must file a lawsuit against you and serve you with a summons telling you to come to court.

Help for Student Loans

Published on: January 25, 2014 | Frank Coxwell

If you are having trouble paying back your student loan debt, the Department of Education has options that will give you more protection from debt collectors collecting on federal education loans. These regulations should make it easier for you to get your federal student loans out of default.

These rules do not apply to private student loans, only to loans made or guaranteed by the federal government. For example, if you are in default you can”rehabilitate” loans by making nine “reasonable and affordable” on-time payments during a period of 10 consecutive months. You must agree in writing to make these 9 voluntary payments (as determined by your loan holder) within 20 days of the due date. This will allow you to get out of default and become eligible for further federal student aid or other repayment programs. Keep in mind that Student Loan Rehabilitation is a 1-time opportunity only. It cannot be repeated.

Some private debt collectors who were collecting on federal loans fail to offer payments that borrowers can afford; instead offering payments based on a percentage of the borrower’s total debt. Such payments mean increased commissions for the collection agencies, but are unworkable for borrowers. Some debt collectors try to also demand minimum monthly payments without telling people about the more affordable alternatives, even though the laws of federal student aid does not require those minimum payments. In 2014, the Department of Education really cracked down on these practices.

Jackson Lawyer Frank Coxwell

Published on: June 13, 2013 | Frank Coxwell

To review the various commercials of bankruptcy and mortgage attorney Frank Coxwell as seen on TV in Mississippi, click here to go to our Media page. Mr. Coxwell covers various areas of bankruptcy and mortgage legal options available in Mississippi to consumers struggling with financial issues. Stop garnishments. Stop Foreclosure. Deal with student loan and tax debt. Stop lawsuits. Protect yourself, your paycheck, your family, and your property.

Fox 40 AM Show Guest Attorney Frank Coxwell

Published on: October 26, 2012 | Frank Coxwell

To review the various clips of attorney Frank Coxwell’s appearances on the Fox 40 AM Show, click here to go to our Media page. Mr. Coxwell discusses multiple topics on the show – the garnishment process, how to stop foreclosures in Mississippi, how to deal with student loans, the pitfalls of the new “business” credit card offers, and more.

Mississippi Garnishment Law

Published on: October 11, 2012 | Frank Coxwell

In order for a creditor to garnish your wages, they must first file a lawsuit regarding the debt in question and receive a court judgment in their favor (win the lawsuit). Once this occurs, they will receive an order of garnishment also referred to as a writ of garnishment. This order is sent to your employer who must hold this writ of garnishment for 30 days. The reason a 30 day hold requirement was placed into the process is to allow time for the employer and the employee to verify that the order is for the correct person, etc. The problem is that employers are not required to notify you that they have received an order of garnishment. They may simply hold it and you will find out 30 days later when your first check is garnished.

It’s important to note that a garnishment is applicable to any money in possession of a third party (ie: your employer, your bank, etc). It’s not limited to only what you earn. Wage garnishment is simply the most common form of garnishment.

Garnishment is an option for a creditor for any type of debt that results in a judgment in favor of the creditor. Lawsuits for breach of contract or to collect debts owed for cars, medical expenses, promissory notes, etc are all applicable. Even debts relating to taxes and domestic support obligations (child support or alimony) can lead to garnishment.

Can filing a Chapter 13 protect the co-signer of my student loan?

Published on: July 12, 2012 | Frank Coxwell

I get countless calls from people asking what they can do to about their parents or grandparents who co-signed for them on a student loan and are now facing garnishment, loss of their tax refunds, or even seizure of their bank accounts because they co-signed and the loans have not been paid.

This is a common tactic for debt collection on student loans. If the student isn’t working – they will go right after anyone who co-signed for the loan. And they have broad powers – there is no notice required – they can garnish, etc without warning unlike collection of normal debt where there must be a lawsuit filed and judgment obtained first, etc.

It’s pretty well known you cannot wipe out student loans through bankruptcy, but if you file a Chapter 13 bankruptcy, you can stop all action – against you AND against anyone that co-signed for your student loan. Chapter 13 bankruptcy protects the debtor and co-debtor. Both do not have to file – just one. If the co-debtor files it protects the main debtor and vice versa. For example – mother co-signed for son’s student loan. Mother files Chapter 13 bankruptcy (maybe even for other reasons) – it protects the son regarding the student loan they both signed for. Or son files Chapter 13 bankruptcy – it protects the mother.