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Stopping Garnishments

When a creditor obtains a judgment against you, the creditor has to go through a legal process to collect on the debt. A judgment is basically just a court order that says a debt has been legally recognized to exist. Two of the most common ways a creditor can collect are through either a garnishment or a levy. Though these terms are sometimes used interchangeably, there is a difference.

A garnishment is a court order wherein a portion of your wages is taken each pay period to satisfy the judgment. The actual amount taken can depend on the number of children under 16 in the house, but the general rule is to take your net wages, after deducting Social Security and income tax only, and from this amount deduct $217.50 per week, as 30 times the federal minimum wage is exempt. The creditor gets 25 percent of any amount remaining. A garnishment is a powerful tool to collect on a judgment if one has a steady job. We can often stop a garnishment through a motion for installment payments filed with the court, as long as it is the first motion filed. On the first motion, a stay of the garnishment is automatically given. For second or subsequent garnishments, the garnishment is not stopped until an order is signed by a judge. For this reason, if a motion is filed, it is extremely important to keep your payments current.

A levy is an attachment of property to satisfy a garnishment. Anything can be attached, but the best thing from a creditor’s perspective is money sitting in a bank account. Unlike a garnishment, when money is taken from a bank account, it is generally gone. Money can be returned if you can show it is Social Security or workers’ compensation, but outside of these narrow exceptions, short of an immediate Chapter 7 bankruptcy, the funds are lost and will go to the creditor. It makes no difference if the money is to be used for child support, rent or a car payment. Tennessee law allows a person to exempt up to $10,000 worth of items, such as a savings account or a vehicle, but the list of claimed exempt property must be filed before the creditor files the levy.

The attorneys at Gentry Arnold PLLC can help you stop a wage garnishment or bank levy. Depending on your particular situation, reasonable payments can be set up before a garnishment or levy sends you into a financial tailspin. It is also possible to stop a garnishment or levy by filing Chapter 7 or Chapter 13 bankruptcy. Upon filing bankruptcy, a creditor is automatically stopped from taking collection action against you without going through bankruptcy court.

We are a debt relief agency. We help people file for bankruptcy under the U.S. Bankruptcy Code.