How to Avoid Wage Garnishment in NJ
When you’re in debt or have other financial obligations, wage garnishment can turn what money you do have coming in into what seems like nothing at all. Preventing wage garnishment can help you have a little stronger cash flow, allowing you to allocate payments where they need to go rather than where your creditors want them to go.
In most cases, wage garnishment can be avoided by making prompt, on-time payments. You can also pay off the debt that’s causing the garnishment or contact the creditor to potentially arrange a modified payment plan. If you fall behind or fall into debt, then garnishment can begin, and you will usually need to talk to the creditor to get garnishment stopped. However, collections can often be stopped entirely by filing for bankruptcy, if appropriate.
For help with your situation, call the NJ bankruptcy attorneys at Young, Marr, Mallis & Associates today at (609) 755-3115.
Avoiding Garnishment in the First Place in New Jersey
Wage garnishment is a tool that is typically only used to collect when you are already behind on payments. Garnishment takes the money straight out of your paycheck rather than giving you a chance to pay it on your own. Since garnishment only begins once there is already a proble, you can usually avoid garnishment in the first place by paying your bills on time and avoiding falling behind.
If you are in a situation where you have to choose between which bills to pay, you can avoid the harshest potential garnishment by paying your biggest bills first. Things like mortgages and car payments are often the largest monthly credit bills people have, though for some, credit card bills will be much larger – and have a much higher interest rate. Allocating payments to the most important and highest dollar amount bills first can help prevent garnishment on those.
If you are able to, paying down or paying off a debt entirely will also prevent garnishment. Though, if you are reading an article about how to avoid garnishment on a bankruptcy attorney’s website, it is likely this is not an option for you.
Keep in mind that sometimes garnishment is automatically applied for certain obligations, usually when it comes to child support and alimony. NJ tends to only use wage garnishment as an enforcement mechanism for unpaid support, but if you have support obligations from another state with automatic wage garnishment, you might not be able to avoid that wage garnishment.
Limits on Wage Garnishment in NJ
Keep in mind that wage garnishment usually cannot take your entire paycheck away from you. There are both federal and state limits on how much can be garnished and when garnishment can take place.
Federal (i.e., nationwide) limitations start with garnishment only applying to your “disposable” income. That means the income after taxes, unemployment, Social Security, Medicare, and other required deductions are paid out of your income. Garnishment also cannot exceed 25% of your disposable income. Alternatively, if you make over 30 times the federal minimum wage, then only the portion over that can be garnished (if that’s less than 25% of your income). So, for example, if your take-home pay in a 40-hour work week is $250/week, then only $32.50 can be garnished. At $300/week take-home, $75 per week can be garnished (25%).
State restrictions are based on 250% of (2.5 times) the federal “poverty level” instead, which has a sliding limit based on household size and income. For example, in a four-person household, the federal poverty level is $30,000 per year, so 2.5 times that is $75,000. If you make under whatever the level is for your household, then garnishment caps at 10% of income. This limit is raised to 25% if the debt is held by the state and you make over 2.5 times the poverty limit. Additionally, garnishment for payments under $48 per week.
In many cases, this means that low earners actually cannot face garnishment. However, you should never try to lower your income just to avoid garnishment; that will make it infinitely harder to ever actually pay off your debt.
Talking to Creditors to Stop Wage Garnishment in NJ
In many cases, creditors will be flexible in helping you stop wage garnishment. It is always up to the individual creditor’s terms and practices, but in many cases, you can try asking your creditor to stop or limit wage garnishment. If you have only missed a few payments, going to court and getting an order for wage garnishment might be hard and time-consuming, so the creditor might be happier to put you on a payment plan. You might also be able to negotiate a payoff with some creditors, potentially easing your debts and burdens.
However, you should always work with a financial expert and potentially speak with a Voorhees, NJ bankruptcy attorney, as many of these debts might actually be dischargeable in bankruptcy.
Stopping Wage Garnishment by Filing for Bankruptcy in New Jersey
When you file for bankruptcy, collections must stop as part of a mechanism called an “automatic stay.” This is one of the biggest benefits of filing for bankruptcy, whether you file under Chapter 7 or Chapter 13. In either case, an automatic stay can end collection calls, stop repayment, and give you breathing room.
However, you must also go through the rest of the steps of bankruptcy; you should not file just to get breathing room and then abandon the process. However, by completing a bankruptcy filing, you may be able to have many of your debts discharged or paid through reorganization. This can help keep many people in financial distress afloat, but it is not the right move for everyone. Make sure to speak with a lawyer about your options before filing.
Call Our Bankruptcy Attorneys in New Jersey Today
For help avoiding garnishment and filing for bankruptcy, contact our Trenton bankruptcy lawyers today at Young, Marr, Mallis & Associates by calling (609) 755-3115.