If you are in debt and your wages are being garnished in North Jersey, it’s important to understand your options to stop or reduce these funds from being taken from your paycheck. Depending on the type of debt involved, options can include negotiating with creditors, claiming hardship, filing for bankruptcy, or even entering a repayment plan. In many instances, filing for bankruptcy can stop garnishment through an automatic stay, meaning you can receive immediate relief. As such, it’s in your best interest to connect with a Bergen County Chapter 7 bankruptcy lawyer from our firm who can help you figure out your best options.
What Is Wage Garnishment?
Wage garnishment happens when a creditor, government agency, or other authorized entity takes money directly from your paycheck in order to satisfy an outstanding debt. As such, rather than receiving your full wages, your employer (who is legally obligated to do so) will withhold a portion of your wages and send it to the creditor.
Garnishment Quick Facts
- Wage garnishment is a legal process that allows money to be taken directly out of a paycheck
- Most creditors must obtain a court order allowing them to garnish wages before doing so
- Certain debts may be collected through administrative wage garnishment without a court order
- Federal and state laws limit how much of your wages can be garnished
- Bankruptcy can stop wage garnishment due to the automatic stay
When Can Creditors Start Wage Garnishment in Bergen County?
It is rare for a creditor to attempt wage garnishment right away. This is usually something that happens because they believe that they have exhausted all other attempts at debt collection. If you ignore correspondence from a creditor and refuse to pay what you owe, they might go to court and ask to garnish your wages.
Sometimes a court order is not even necessary. Debts like unpaid student loans, alimony, child support, and back taxes can result in wage garnishments through a process known as administrative wage garnishment, or AWG. Coincidentally, these are also the types of debt that are difficult, if not impossible, to wipe out in bankruptcy.
Debts That Can Lead to Garnishment
- Medical debt
- Credit card debt
- Federal student loans
- Personal debts
- Domestic support obligations (child support and alimony)
- Certain state and federal tax debts
- Court judgments
Are There Ways to Stop Wage Garnishment in New Jersey?
There are a few ways to stop your wages from being garnished.
Common Ways to Stop Wage Garnishment
- Paying off your debt
- Making a payment plan with a creditor
- Making a payment plan through debt counseling
- Filing for bankruptcy
- Asking for an exemption due to hardship
Additional Options That May Be Available
- Negotiating a lump sum payment with the creditor
- Challenging incorrect or fraudulent debts
- Requesting a child support or alimony payment modification through the family court
- Contesting improper service of a lawsuit
- Seeking relief under New Jersey exemption laws, when possible
Individuals facing wage garnishment in Bergen County often have different concerns, depending on the source of the debt. Whether the garnishment is the result of credit card debt, medical bills, or outstanding support, the remedies available can vary under both federal and New Jersey law.
Can an Automatic Stay Stop Wage Garnishments in Bergen County?
While bankruptcy can be an overwhelming and stressful process, many individuals with considerable debt find this to be a powerful tool, especially due to the automatic stay that is granted upon filing. An automatic stay is a court order that stops almost all collection activity immediately after a bankruptcy case is filed.
For many individuals in Paramus, Hackensack, Ridgewood, Oradell, and other Bergen County towns who are facing wage garnishment, the automatic stay can provide immediate relief and prevent continued wage garnishments.
Key Considerations
- In many instances, most wage garnishments stop once bankruptcy is filed
- Creditors must typically cease collection activity
- Employers may need notice before payroll deductions stop
- Certain exceptions apply
What Should You Do After Filing for Bankruptcy
After filing for bankruptcy, you should:
- Immediately notify your Bergen County bankruptcy attorney if garnishments persist
- Confirm that your employer has received notice of the filing
- Confirm that creditors have received notice of the filing
- Review all future paychecks carefully
- Keep copies of payroll records and garnishment notices
Does It Matter Which Chapter of Bankruptcy I File For?
When you file for Chapter 7 or Chapter 13 bankruptcy, an automatic stay is issued. This stops debt collection activities, and this includes wage garnishment. A creditor that wants to continue garnishing your pay will have to go to court and get the stay lifted, and the success of this petition is far from guaranteed.
Once collection activities are stopped, you make a plan to pay off your debt. A bankruptcy does stay on your record for years, though, so only do this if you can actually wipe out a significant amount of your debt through this process. Some types of debt, like back child support and student loans, are not going to be wiped out through bankruptcy. This is why it’s important to consult with an attorney and figure out the best method to address a wage garnishment, even if bankruptcy is not the way to go.
Chapter 7 Bankruptcy and Wage Garnishment
- May discharge unsecured debts
- Typically finishes much faster than Chapter 13
- Can stop qualifying wage garnishment through the automatic stay
- Ideal for those who meet the eligibility requirements
Chapter 13 Bankruptcy and Wage Garnishment
- Establishes a court-approved repayment plan
- Long-term repayment allows individuals to catch up on certain obligations
- Can provide more long-term protection from debts
- May be more appropriate for those with a regular income
What Types of Wage Garnishment Cannot Be Stopped by Bankruptcy in NJ?
While the automatic stay can help stop debt collection in many instances, it does not eliminate all wage garnishment actions. Certain obligations are eligible for special protection in accordance with federal law, meaning these debts may continue being collected despite a bankruptcy filing.
Whether bankruptcy stops garnishment depends largely on the underlying debt. In most instances, garnishments related to dischargeable, unsecured debts may stop after bankruptcy due to the automatic stay, while those stemming from outstanding child support, alimony, or certain taxes are treated differently and may continue despite bankruptcy.
Wage Garnishment That May Continue
- Child support
- Alimony
- Certain tax obligations
- Some government fines and penalties
- Certain student loan obligations
Why These Debts Are Treated Differently
- Many of these debts are considered non-dischargeable
- Federal law provides additional collection protections
- Public policy favors continued collections
- Collection efforts may continue even after bankruptcy is completed
Talk to a Bergen County Bankruptcy Attorney
If you are dealing with wage garnishment and other debt collection actions in Oradell, Paramus, Hackensack, or any Bergen County community, bankruptcy may be your way out. Contact the Law Office of Boyd & Squitieri to schedule a consultation with our team. We can tell you more about the bankruptcy process and help you figure out if it’s the right option for you.