New Jersey Wage Garnishment Defense
Wage garnishment is one of the most frustrating and unpleasant forms of debt collection. You do not even get the dignity of depositing your paycheck and tendering payments to your creditors as you are able. If you are facing wage garnishment on defaulted loans or other debts, it is important to understand your rights and options for relief.
The wage garnishment defense attorneys at Lance Brown & Associates have years of experience helping consumers struggling with debt to find their way toward financial security and freedom. We will work with you to find a solution to your debt troubles and put a stop to aggressive collection efforts like wage garnishments. Call the dedicated and passionate debt relief lawyers at Lance Brown & Associates for assistance.
What is Wage Garnishment?
Wage garnishment is a legal process by which a creditor attaches your wages directly, rather than waiting for you to collect your wages and then pay your debt. In practice, the creditor will send a court judgment to your employer, who will then be legally obligated to withhold a portion of your wages and send them to the creditor. In addition to wages, other forms of income, such as bonuses and commissions, can also be subject to a wage garnishment order.
How Can a Creditor Obtain Wage Garnishment?
In most cases, wage garnishment will not happen automatically. Lenders such as credit card companies, medical institutions, and personal lenders are not permitted to go directly to your wages to collect. Instead, they must obtain a court judgment and order specifically calling for wage garnishment, which they will then send to your employer.
There are a few exceptions to the court order requirement, depending on the nature of the debt and the type of creditor. The government can start garnishing your wages to collect back taxes without a court order. Your wages may also be garnished to pay back defaulted student loans and court-ordered child support without an additional court order relating to nonpayment. In New Jersey, all child support orders include automatic income withholding.
Limits on Wage Garnishment
Although wage garnishment is a permissible, legal mechanism, the State of New Jersey does not wish to allow you to fall into poverty because all of your wages are taken before you even get your hands on them. For that reason, the state imposes limits on the total percentage of your income that may be withheld for garnishment.
Federal law establishes an outside limit of 25 percent of disposable income (after taxes & deductions) for garnishment. Many states, including New Jersey, impose even more limitations. In New Jersey, no more than 10 percent of your income can be withheld for garnishment if you earn less than 250 percent of the federal poverty income level for a household of your size. If you earn more than 250 percent of the federal poverty level, then up to 25 percent of your wages can be garnished.
Notably, the limitation does not apply to child support: Up to 60 percent of your wages can be garnished for owed child support if you are not otherwise supporting a spouse or child who is not subject to the child support order. If you do support another spouse or child, the limit is 50 percent. Federal back taxes are also not subject to New Jersey’s wage garnishment limitations.
Eliminating Wage Garnishment Through Bankruptcy
There are a variety of ways to stop wage garnishment, including by becoming current with your debt obligations. If you are struggling with debt and facing wage garnishment, one way to stop a garnishment is to file for bankruptcy. Whether you file under Chapter 7 or Chapter 13, the court will issue an automatic stay of all collection efforts, including wage garnishment. A creditor seeking to continue garnishing your wages will have to petition the court to lift the stay. If their debt is covered by your bankruptcy, it is unlikely they will proceed. For other debts, such as child support, the creditor may be able to get the stay lifted, but they will need to petition the court. The stay will give you some additional time to get your finances in order at the least.
If your wages are being garnished or you are facing other aggressive debt collection efforts, don’t torture yourself with sleepless nights filled with worry and anxiety, and don’t let creditors treat you like a second-class citizen. Call Lance Brown & Associates at 609-587-5100 to find real solutions and effective, lasting debt relief.