Learning More About Wage Garnishment and Bankruptcy in Tampa
What is wage garnishment, and how does it impact debtors in the Tampa Bay area? To better understand the situations in which your wages can be garnished, and the ways in which filing for personal bankruptcy may be able to provide you with some protection from wage garnishment, we should take a closer look at the law.
If you have questions about wage garnishment in Tampa, Florida, you should reach out to an experienced Tampa consumer protection attorney as soon as possible. At Samantha L. Dammer, we understand the complexity of debt and bankruptcy issues for individuals and businesses in our area.
What is Wage Garnishment?
For debtors, wage garnishment can be an extremely anxiety-inducing term. What is it? According to a pamphlet from the Florida Bar, wage garnishment is a process that can happen after a court enters a judgment against you. As the pamphlet explains, in such a judgment you are identified as the debtor, and that judgment can last up to 20 years, depending on the circumstances. In other words, the party that sought the judgment against you can collect on what it is owed either until the debt has been paid in full or for a time period of up to 20 years after the judgment has been filed with the clerk of court and recorded. The state of Florida also allows for the accrual of interest on the judgment.
Now, how does a judgment come into play when we are discussing the issue of wage garnishment? As the pamphlet explains, “if a judgment is entered against you by a court, your wages or bank account may be taken from you to pay the judgment,” and “this is called a garnishment and attachment.” To be sure, money you make can be taken to pay off a judgment. This garnishment of wages is allowed by law once the judgment creditor gets a continuing writ of garnishment. In these situations, the debtor’s employer is required to deduct money from each paycheck until the judgment has been paid off.
Limitations of Wage Garnishment
Just because a creditor has obtained a continuing writ of garnishment does not mean that all, or most all, of your paycheck can be used to pay off your debt. As the pamphlet notes, federal law places limitations upon the amount of wages that can be garnished. Specifically, “garnishment cannot exceed more than 25 percent of your net wages or the amount that you take home that is more than 30 times the federal minimum wage per week, whichever is less.” Then, within these restriction, the garnishment can continue until the judgment has been paid or until 20 years pass.
It is also important to know that many types of benefits are exempt from garnishment. The pamphlet identifies the following types of income as exempt:
- Social Security benefits;
- Workers’ compensation benefits;
- Unemployment benefits;
- Disability benefits;
- Veteran’s benefits;
- Retirement benefits;
- 401(k) plans;
- Life insurance benefits;
- College savings funds;
- Medical savings accounts; and
- Earned income credits.
Bankruptcy and Wage Garnishment
Although there are exemptions to wage garnishment, which we noted previously, filing for bankruptcy may also be a tool to stop wage garnishment. When you file for bankruptcy, the automatic stay will prevent creditors from continuing to collect from you—this includes wage garnishment activities. And if the debt for which your wages have been garnished is discharged through bankruptcy, then the bankruptcy also ends the wage garnishment.
Bankruptcy and wage garnishment are complex, and it is important to have an experienced Tampa bankruptcy lawyer on your side. One of our dedicated advocates can answer your questions today. Whether you are an individual or a business owner in the Tampa Bay area, we can help. Contact Samantha L. Dammer to learn more about our services.