Are you facing wage garnishment? With the world slowly growing more comfortable with hitting the “play” button after years of pauses and holds brought on from the Covid-19 pandemic, creditors are beginning to resume garnishments, and we’re seeing a drastic increase in wage garnishment across the country. If you have debts—whether they be credit card, medical, or otherwise—it’s important to understand how wage garnishments work, and what your options are to negotiate or even stop collections.
We sat down with Pacific Cascade’s bankruptcy attorney, Darin Wisehart, to discuss the most important aspects of wage garnishment to understand:
What exactly is wage garnishment?
“A garnishment is when a creditor has the ability to force you to pay them, primarily through wage garnishments, which is through your employer,” explains Wisehart. “Essentially, a creditor has decided that you owe them money, which requires them to go get a judgment. Once the judgment is signed by the judge, the creditor can then go and ask that person's employer to pay them a portion of their income to that creditor until that debt is paid off.”
What’s the role of my employer in wage garnishment?
“When [a creditor] files the garnishment order, or the writ of garnishment, they'll send it over to the employer and say, ‘We demand that the employer pay 25% of the employee’s wages to us.’ This writ of garnishment then demands that the employer takes that percentage of money out of your income. And they don't really get a choice on that, because they'd be in violation of a court order if they don't do it,” says Wisehart. “I have people who will call me and they'll be angry at their employer, but their employer really doesn’t have a choice. They're forced to do that because that's what the law requires. If [the employer] doesn’t do it, then that creditor can go after the company—they can go after your employer, and you really don't want that, right? That's not a good situation.”
Do I have any negotiating power over garnishment?
“I want to be sure that people understand that the second you get service of that judgment, that's when you need to talk to an attorney because that's when you have the most doors open,” explains Wisehart. “You have the best ability to deal with these things head-on, and to tackle and potentially get them taken care of at that point, rather than letting them carry until they get to garnishment. Once your wages are being garnished, you're not going to be able to settle the creditor for much less than maybe 70% or 80%, because they’re already getting their 25% and saying, ‘Well, I'm getting money now, why would I want to settle with you?’”
What are my options to stop wage garnishment?
“Bankruptcy is your path to force the creditor to stop the garnishment, and conceivably, you're supposed to be able to stop the garnishment the day that you get a case number,” says Wisehart. “Now, one of the tricky parts about this is that with garnishments, it's like a big train: it takes a couple of days to stop, and sometimes payroll has already been submitted for a certain pay period. I always talk to clients about timing and making sure that we're trying to stop the train as soon as we can. You want to be sure that you're aware that it does take a little bit, so don't procrastinate, and make sure you're working on it right away.”
Once I file for bankruptcy, is there any way to get any of that money returned?
“Huge, huge neon sign on this one and the sign says: '90 days before you file your case'—that’s the period of time that you can conceivably have your attorney go and try to force that creditor to return the funds,” says Wisehart. “So, for example, if you were garnished $1,000 a month for the last three months, there's a potential that you can get that money back. A lot of people come to me, and they don't know about this—they’ll say it’s just dead money, it’s gone, and it’s in the past.”
Are there any parameters to getting garnished wages returned through bankruptcy?
Say we filed your bankruptcy case today; we can look back 90 days, and any money that was taken by a creditor, if it was over $600—if it was $599, we don't get it—but if it was over $600, we can ask them to throw it back to us, and we're pretty successful at getting that done,” says Wisehart. “Ultimately the idea is, let's take a look and see if we can get it back because that might make your path through bankruptcy smoother, especially if you have other debts that we're dealing with or other reasons to go through a bankruptcy. It might make it more attractive as an option to get through. Nobody ever looks at bankruptcy as your first option, but as an option to get you to the best possible spot down the road in the smoothest way. That's the goal, and if we can get money back in that process, why not?”
To listen to Darin’s full interview, you can access it via our firm podcast, Modern Family Matters. If you would like to set up a free consultation with Darin to discuss your options for addressing wage garnishments or filing for bankruptcy, don’t wait! Call our office at (888) 981-9511 to start creating your game plan for paving a path towards a better tomorrow.