We have locations available by appointment in the following areas. Please call us to speak to an attorney and set up an initial meeting.
If your wages are being garnished, there is no question that this additional strain on your financial situation can feel like the last straw. Many people find the reduction in their paycheck the primary reason they consider filing for bankruptcy.
If you have questions about how bankruptcy and wage garnishment in Dearborn interact, now is a good time to ask. Our compassionate bankruptcy attorneys can help you understand your rights while walking you through the process step-by-step.
Wage garnishment is a legal process that allows creditors to collect unpaid debts directly from a debtor’s paycheck. After a creditor wins a judgment in court against you, they can request a writ of garnishment and serve it on your employer. This court order requires your employer to withhold a portion of your earnings and send it directly to the creditor until the balance is paid.
Before any money is taken, the debtor must be notified of the garnishment and given an opportunity to object. Michigan law limits how much can be withheld from a person’s wages. In general, the company may not withhold more than 25 percent of disposable income or the amount exceeding 30 times the federal minimum wage, whichever is less. Certain income sources, such as Social Security and unemployment benefits, are generally protected from garnishment.
The process continues until the full debt, interest, and court costs are paid. For many people, this can make covering daily expenses difficult. The good news is that one of the bankruptcy protections available to Dearborn bankruptcy filers is the termination of any existing wage garnishments.
One of the biggest advantages that comes with filing for protection under the U.S. Bankruptcy Code is the automatic stay. As the name suggests, the automatic stay goes into effect the moment you file your petition. Once the automatic stay is in effect, it halts wage garnishments and all other types of collection efforts.
With the automatic stay, employers are required to release the garnishment and pay you your full wages as soon as they are notified of the court filing. Your creditors are not only barred from receiving a portion of your wages through existing garnishments, but they may not file new garnishments with your employer either. The stay extends into all areas of debt collection, meaning that your creditors also cannot file lawsuits or even call and pressure you to pay down your debt.
For most people, the discharge of their debts through bankruptcy means the risk of wage garnishment is over. It is important to note that there are certain obligations that cannot be discharged, meaning they will survive the process once you exit bankruptcy. Some examples include:
In some situations, creditors can file something called a motion for relief to get a court order that gives them the right to ignore the automatic stay and continue collection efforts against you. Our attorneys can help you understand how your Dearborn bankruptcy filing might impact wage garnishments related to these obligations.
If you are living under the strain of wage garnishments, it may be time to consider filing for bankruptcy. This option might seem daunting at first, but it may be your best shot at a fresh financial start.
Do not let a wage garnishment impact your ability to cover essentials like housing or food. Reach out to our team to learn how we can help with bankruptcy and wage garnishment in Dearborn, or visit our debt calculator for a free assessment of your situation.
We have locations available by appointment in the following areas. Please call us to speak to an attorney and set up an initial meeting.
We are a debt relief agency helping people file bankruptcy under the United States Bankruptcy Code.
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