Wage garnishment in New York happens when a court orders your employer to withhold a specific amount of money from your paycheck and have it sent directly to the creditor you owe money to. There are many reasons why people have their wages garnished, though some of the most common include child support, consumer debts and student loans.
If you’ve had your wages garnished, it’s easy to feel helpless and powerless. But it’s important to know that you do have rights. And, if you can’t afford to lose from your paychecks, you can look into filing bankruptcy to stop wage garnishments.
Let’s learn more about what wage garnish means, how much creditors can take from you and when it makes sense to file for bankruptcy.
How Much of My Wages Can Be Garnished in New York?
New York State wage garnishment laws provide borrowers with slightly more protection than federal law. Creditors can take up to 10% of your gross wages or 25% of your disposable income. However, if your disposable income is less than 30 times minimum wage, it cannot be garnished.
Social Security and any other benefits are exempt from wage garnish. The only place you will see money being taken from is your monthly earnings. However, you do have the right to vacate the judgement even if money is being taken from you. When and if the judgement is vacated, the court can order the creditor to return the money.
What Does it Mean to Vacate a Judgement?
Making a judgement disappear isn’t exactly easy. To be successful, you’ll need to do one of the following:
- Appeal the judgement and have the appeals court render the original judgement void
- Ask the original court to stop the default judgement
Each state has its own laws when it comes to vacating judgements. Here in New York, a judge can vacate a default judgement if they believe you had a reasonable excuse for missing the court date and a strong defense to the lawsuit.
Even if the judgement is vacated, it doesn’t mean that the lawsuit itself goes away. In fact, when you vacate the judgement, it means that the lawsuit is active again. If you win, it will be shown on your credit report. If you don’t, a new judgment will be issued.
Can Filing for Bankruptcy Stop Wage Garnishment in New York?
If you’re like most people, you can’t afford to lose money out of your paycheck every month. This could put you in a deeper financial hole. You might be resolving your debt on one end but racking up your credit cards in the meantime. If this is the case for you, it might make sense to file for bankruptcy.
Filing for bankruptcy will stop most garnishment types and erase your other debts in the process. This way, you can come out of this situation stronger. However, it’s important to choose a qualified and experienced bankruptcy attorney who can help you through this process and ensure a successful outcome.
How Quickly Can Bankruptcy Stop Garnishments?
When you file for bankruptcy, a court order goes into effect. This order prohibits most creditors from collecting debts. As good as this sounds, this court order is sometimes only valid for 30 days depending on if you’ve filed for bankruptcy before.
It’s also important to note that bankruptcy doesn’t stop all wage garnishment in New York. For example, if you’re filing Chapter 7 bankruptcy, you will still be responsible for domestic support obligations like child support or alimony. Chapter 13 bankruptcy, on the other hand, stops all garnishments, including those for domestic support obligations.
To stop wage garnishment quickly, you’ll need to file for bankruptcy and work with your attorney to make sure your employer and garnishment creditor are notified. However, it can take the court a week or more to send the official notification to your creditors.
Once the creditor knows of the bankruptcy, all garnishments must stop. If you’ve lost some money, it’s probably best to let things be. While you can get some of the money back, it probably won’t be worth the cost. Fortunately, once your bankruptcy ends, your creditors cannot resume garnishments on discharged debts like credit card balances and personal loans. You can put the past behind you and move onto a better life.
Ready to Take Back Your Paychecks? Schedule a Consultation with Our Bankruptcy Attorney
While bankruptcy is a big decision that does not make sense for everyone, it does make sense for some. And it’s possible that this is what you need to stop wage garnishments in New York. In the process, you can also put to rest past debts.
William Waldner is a bankruptcy attorney who personally handles each and every case. You can expect the highest quality of service and attention to detail when you work with William. Contact us today to learn about the best ways you can get back on track with your financial goals.