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A wage garnishment can be financially devastating for most people. If a creditor garnishes your wages, you might be left without enough earnings to meet your daily living expenses if you live from paycheck to paycheck.
If you are dealing with unmanageable levels of debt and are unable to keep up with your payments, your creditors might seek a wage garnishment order from the court to forcibly recover what you owe from your paychecks. Here is some information about wage garnishments and how you might be able to stop them from Ike Shulman, an experienced bankruptcy attorney in San Jose, California.
What Are The Most Common Types of Wage Garnishment?
While all wage garnishments have the effect of taking money directly from your paychecks, there are several different types. The amount that can be taken will depend on the type of garnishment that is issued against you.
Credit Card or Medical Debt Garnishments
Many Californians get into trouble with their credit cards and depend on their cards to help make ends meet. Similarly, unexpected illnesses or injuries can quickly cause medical debt to balloon.
Typically, creditors are willing to set up payment plans to repay these types of debts. However, if arrangements are not made or kept, credit card companies and medical creditors might seek wage garnishment orders.
Student Loan Garnishments
Millions of Americans have substantial student loan debt, and the debt collection practices of student loan companies are aggressive. Most debtors are also unable to discharge student loan debt in bankruptcy unless they can prove that reaping the loan would cause an undue financial hardship.
Tax Levies
The Internal Revenue Service (IRS) doesn’t have to ask the court for a wage garnishment order before it garnishes our wages. Similarly, the California Franchise Tax Board can also garnish your wages if you owe back taxes to the state to recover your unpaid tax obligations.
Child Support Garnishments
If you have a child support order and fail to make your payments, you can quickly get into trouble with the court and face substantial wage garnishment. Child support garnishment orders allow the state to garnish most of your disposable income. If your financial circumstances have changed since your child support order was issued, it is best to try to get your order modified instead of falling behind on your payments.
How Much Of My Wages Can Be Garnished?
The maximum amount that can be garnished from your wages in California will depend on the type of garnishment you have.
Garnishment Limit for Judgment Creditors
If your garnishment is for money owed to a judgment creditor that has secured a judgment against you in court, the maximum amount that your wages can be garnished is either 25% of your disposable weekly earnings or 50% of how much your weekly earnings are more than 40 times the hourly minimum wage.
Under Cal. Civ. Proc. § 706.050, the local minimum wage in your area will be used for the calculation if it is greater than the state’s minimum wage. For example, while the California minimum wage is $15 per hour, the San Jose minimum wage is $16.20 per hour. If you live in San Jose, the relevant hourly wage that can be used for the calculation is $16.20 per hour.
Garnishment Limit for Student Loan Debt
If your federal student loans are in default, the government or its debt collection entity can garnish your wages without getting a court order. Under 20 U.S.C. § 1095a(a)(1), up to 15% of your wages can be garnished for defaulted student loans. However, your income up to 30 times the federal minimum wage is protected from garnishment each week under 15 U.S.C. § 1673.
It is important to note that the federal minimum wage is $7.25 per hour, which is the minimum wage that will be used to calculate the student loan garnishment amount instead of the local or state minimum wage in California.
Child Support Garnishment Limit
Child support orders issued in California since 1988 that are issued by the courts have automatic wage withholding orders. If you fall behind on your child support payments, your child’s other parent can also ask the court for a wage garnishment order. Under 15 U.S.C. § 1673, the state can garnish a maximum of 50% of your weekly disposable earnings to pay arrearages of support if you have a different child or spouse to support.
If you aren’t supporting another child or spouse, however, up to 60% of your disposable wages can be garnished. Finally, if your arrearage is for more than three months, the state can take another 5%.
Tax Levy Limits
If you owe back taxes, the government can levy your wages without a court order. The exempted amount will be based on your standard deduction and the total of your personal deductions for the tax year divided by 52.
If you don’t verify the number of dependents you have and your standard deduction, the federal government will base your exempt amount on the standard deduction given to a person with one personal exemption filing as a married person filing separately under 26 U.S.C. § 6334(d). If you owe back taxes to California, the state can take up to 25% of your net income.
How To Stop Wage Garnishments in California
To stop wage garnishment in California, you should first understand the laws about the various types and the maximum limits allowed. In most cases, a creditor can’t get a wage garnishment order unless they have first filed a lawsuit against you and obtained a judgment against you from the court. However, going through the court process is not required for student loans, child support, or back taxes.
If you are struggling to pay your credit card or medical debt, you should contact your creditor to make payment arrangements. Most will be willing to work with you so that they can avoid going through the court process to recover what they are owed. If you secure a payment plan, make sure to keep up with it to avoid having your wages garnished.
Another way to stop garnishments is to file a claim for an exemption. Under Cal. Civ. Proc. Code § 706.051, if you can show that you need a larger portion of your earnings to support your family than the regular exempt amount, it may be possible to exempt more of your wages or all of them from a garnishment.
The final way to stop wage garnishments is to file for bankruptcy protection. While it might sound scary to consider bankruptcy, filing a petition will result in an automatic stay that will immediately stop wage garnishments, excluding support garnishments. Bankruptcy might also help you discharge most types of unsecured debts and can provide you with a fresh financial start.
However, if you have non-exempt assets, they might be sold by the bankruptcy trustee to repay a portion of your debts.
Where to Find A Wage Garnishment Attorney in San Jose, CA
Wage garnishments are frightening for most people. It is important to note that your employer can’t fire you based on having one wage garnishment, however. If you are dealing with a wage garnishment or are facing a creditor lawsuit, you should reach out to an experienced wage garnishment lawyer in San Jose at the Shulman Law Office.
Attorney Ike Shulman has been fighting to protect the rights of his clients for decades and will take the time to understand your situation and help you understand the legal remedies that might be available. Call us today for a free consultation at 408-297-3333.