How to Challenge Wage Garnishment

how to challenge wage garnishment

If you are unable to pay certain kinds of debts, creditors have the ability to seek legal recourse by taking you to court and securing a wage garnishment order against you. Wage garnishment is a court order sent directly to your employer, requiring them to withhold a specific amount of money from your paycheck to be sent to one of your creditors. The good news is you may be able to challenge the garnishment by objecting in court. Here, we explore your options when creditors start coming for your paycheck.

Before we talk about how to object to wage garnishment, it is important to note that there are federal and state rules in place to protect debtors from unfair wage garnishment practices. The amount your employer can withhold and the specific rules will be different depending on what kind of debt is in question and what your personal financial situation looks like. In New Jersey, there are specific laws in place to ensure you will have enough money to pay for your living expenses while your wages are being garnished. Creditors can only take up to 10% of your income when you earn less than 250% of the federal poverty level OR up to 25% when you earn more. Employers also cannot fire their employees for receiving a wage garnishment order.

In New Jersey, a creditor can garnish your wages only after they have sued and obtained a court judgement against you. The exception to this rule is if the creditor is collecting unpaid income taxes, child support payments, or defaulted student loans. Once your creditor has decided to sue you in an attempt to secure a judgement against you in court, you will likely receive a written notice and a hearing before your employer will start withholding money from your paychecks. This notice is called a Notice of Garnishment of Personal Earnings.

Once you receive this notice, you have to act fast. Your right to object to wage garnishment is limited and time sensitive. Depending on the debt in question, you can have between five and thirty days to bring forth a legitimate objection to the court decision. If you do not object within this time frame, your right to object to the garnishment is legally waived and your employer can begin withholding wages to send to your creditor. The garnishment letter will contain instructions on how to object, including specifics on court dates, deadlines, and expected objection formats.

If you decide to argue against wage garnishment and you receive a new hearing date to plead your case, there are a few valid legal reasons to object to the court order. Though this is a time consuming and complicated process, you still only have a limited time to present your case to the court. Some common reasons to object to wage garnishment are:

  • Federal or state limits aren’t being followed
  • You have a head of household exemption
  • Your creditor did not follow proper legal procedure
  • You are self-employed
  • The debt in question has been paid
  • You are already experiencing wage garnishment with another creditor
  • You are making payments to the creditor already
  • You have filed for bankruptcy

An experienced attorney will be able to work with you through some of the more difficult aspects of the court proceedings. They will know what the court is looking for and how what objections will work based on your specific case.

At Veitengruber Law, our experienced team will work with you to come up with a customized legal plan to meet your needs. If you are struggling with debt, it may be time for a fresh start. Our bankruptcy and debt relief legal team has years of experience working with clients to ensure a brighter financial future. We can help you explore all your options and protect your interests.

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Can Wages be Garnished for Money Borrowed from a Friend?

There are certain situations in life that call for borrowing money from a family member or friend: if your financial situation is less-than-optimal, and if your credit score is poor. When you’ve exhausted all traditional lenders and “bad credit” lenders, your Hail Mary may be asking someone you know to lend you money.

In these situations, most people make grandiose promises to pay the money back (sometimes with interest). Out of sheer gratitude, it can be easy to make promises you’ll never be able to fulfill. On rare occasions, the friend or family member (especially if it’s one of your parents or grandparents) will wave you off if and when you try to pay them back. Note the use of the word “rare.”

The honest truth of the matter is that, unless they’re abundantly wealthy with cash flowing in faster than they can spend it, your personal lender is going to expect to be repaid the money that you borrowed from them. In all likelihood, they’ve probably dug into a savings account that was specifically earmarked for something important in their own life, like paying for a child’s college education or putting a down payment on a home, in order to help you out of a bind. Failure to repay this ultra-generous favor is frankly very uncool.

Just as you wouldn’t borrow money from a traditional lending company or banking institution if you had no means to pay back the loan (because they wouldn’t lend you the money if you didn’t qualify in the first place) – you shouldn’t take money from a friend or relative if you have a pretty solid hunch that repaying them isn’t in the cards.

What can happen to me if I never repay a debt I owe to a friend?

Just as any debt that you leave unpaid, the lender (in this case, your pal) has every right to collect the money from you. Naturally, most loans of the personal nature tend to start out with the lending party casually mentioning the money he’s owed. This may happen several or a multitude of times, depending on the nature and patience level of the person who loaned you the funds.

You can prevent straining your friend’s patience by making a plan to pay him back the very second his money hits your hand. After all, “it takes many good deeds to build a good reputation, and only one bad one to lose it.” Electing to borrow money from anyone and then ignoring their requests for repayment is a bad deed, indeed.

Your good-natured lending friend is likely to tire quickly of gently asking you for the money he’s owed, and personal relationships are bound to suffer the longer you fail to make good on your handshake agreement. What many people don’t know is that even personal loans between friends and family members can be enforced in the NJ court system.

What started out as a buddy helping a buddy out can end with a nasty court case wherein you’ll be sued for the money owed, and wages can be garnished from your paycheck if you don’t have enough money to satisfy the judgment straight away.

Save yourself the hassle and a relationship that you likely value: start repaying the money you borrowed, even if it’s a small amount at a time. Good faith often goes a long way, especially when life-long friendships are involved.

Wage Garnishment: FAQ

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What is wage garnishment?

If you owe money to a person or company that you have failed to repay or even begin to repay, the creditor (entity to whom you are indebted) can obtain a court order against you. This court document will order your current employer to take a specific amount of money out of each of your paychecks. This money will go directly to the creditor to whom you owe money.

How much of my paycheck can be garnished?

There are federal laws in place that limit the amount of money that can be garnished from anyone’s paycheck so that the debtor can still manage their monthly expenses. Generally, no more than 25% of your income (after deductions) can be garnished by any combination of creditors who may be seeking money from you.

Can I lose my job because of a wage garnishment?

If you have only one garnishment against your wages, your employer does not have the right to terminate your employment, nor can they punish you or treat you any differently because of a wage garnishment.

Multiple wage garnishments filed against you will give your employer some rights to take action. For example, suppose your employer discovers that you are neck-deep in unpaid debt and your job duties include dealing with company finances. Your severely disordered finances at home send up a red flag, and many times employers do have rights against you when the garnishments keep rolling in.

What can I do to eliminate a wage garnishment?

If you feel that a wage garnishment has been filed against you erroneously, you can protest the garnishment at a court hearing. You may also have rights if you cannot manage your bills with the wage garnishments set as they are.

Additionally, you can immediately eliminate any and all wage garnishments by simply paying off the debts in full. If you are starting a new job and don’t want your new employer to know that you owe money to a creditor, your best bet is to try to work with your debt negotiation lawyer to lower the amount you owe so that you can pay it all off in one fell swoop.

Can I eliminate all wage garnishments?

While you can “cancel out” a wage garnishment for say, credit card debt, defaulted loans or medical debt, some garnishments are harder (and sometimes impossible) to remove. For legal reasons, if you owe child support, your NJ county court will automatically set a wage garnishment action in place once your Final Judgement of Divorce has been entered. This guarantees that your children will always be cared for appropriately with no missed payments.

The same is true if you owe money to the federal or state government in the form of back taxes, or if you have delinquent student loans. In fact, wage garnishments for child support, taxes and student loans can even be initiated without a court order.

If you are facing a wage garnishment in New Jersey that you feel is inaccurate or that is preventing you from meeting your other basic financial obligations, work with your NJ debt relief attorney to either modify the wage garnishment order(s) or eliminate them if they are unlawful.

 

Image credit: Tax Credits

Have Your Wages Been Garnished? You Have Options.

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Wage garnishment is a legal situation in which your employer is required to withhold a specific amount of money from your paycheck in order to repay one or more of your creditors. In order for most creditors to have a valid wage garnishment order, they must have a judgement from the court stating that you legally owe them money and that your wages may be garnished until such time as the debt is repaid in full.

Naturally, when you borrow money from a creditor, you enter into an agreement that states your intention to repay the money you borrow. Whether you owe money to a creditor, the IRS, a secondary learning institution (student loans), a medical institution or an ex-spouse, it is possible that you will have your wages garnished if you fail to make payments on your debt.

It is understandable that debtors should be held responsible for their financial obligations. However, you still have to be able to survive while you are repaying your creditors. If you currently have wage garnishment(s) against you, there are some specific federal and state regulations that you should become familiar with.

  • Not all debts are created equal. Some types of debts do not require that a creditor receive a court order for a wage garnishment to commence. If you’ve received a child support order since 1988, it also contained an automatic wage garnishment order. No additional court order is required. The same goes for any unpaid income taxes and student loans that you’ve fallen behind on. Credit card debt and medical bills are debts that require the creditor to sue you and obtain a judgment and order from the court before your wages can be garnished.
  • Wage garnishments have limits. Federal laws state that your creditor(s) can take 25% of your disposable earnings OR your disposable earnings less 30 times the current federal minimum wage, whichever is less. New Jersey wage garnishment laws further limit how much your creditors can garnish. Under NJ wage garnishment rules: creditor(s) can garnish up to 10% of your wages if you make less than 250% of the U.S. poverty level. If your income is more than 250% of the poverty level, creditor(s) can garnish up to 25% of your wages.
  • You cannot be fired due to a wage garnishment order in New Jersey. Some employers may not like dealing with a wage garnishment order, which may tempt them to fire you so they don’t have to comply. In New Jersey, this is illegal. All employers must comply with wage garnishment orders.
  • Wage garnishments can be negotiated. If you’ve received a wage garnishment order from one or more of your creditors, you may very well be quite upset and anxious about losing a significant portion of every paycheck. A NJ wage garnishment order that will impede your ability to pay all of your monthly expenses can be appealed. Veitengruber Law will sit down with you to go over your living expenses and the garnishment that has been ordered. We will then formally object to the order and request that the court lower the amount of the garnishment.
  • Bankruptcy will halt a wage garnishment order. If you’re in extreme dire straits, you should consider filing for bankruptcy. Firstly, as soon as you file for bankruptcy, something called an automatic stay goes into effect, which prevents any of your creditors from collecting any money from you. (Exempt from this, of course, are alimony and child support.) Secondly, if satisfying a wage garnishment is well beyond your means – you probably should have filed for bankruptcy awhile ago.

To learn more about how we can help you with your wage garnishment dilemma, call Veitengruber Law at (732) 852-7295. We offer free first-time consultations, and payment plans that are extremely reasonable.