If I Have a Wage Garnishment in New Jersey, Will My Employer Find Out?
A “wage garnishment” order is a court order that allows creditors to take money directly out of your income to pay off debts you have to them. For many people, a wage garnishment can be a difficult arrangement. Garnished wages can make it tough to manage monthly expenses or participate in activities you enjoy. If you have garnished wages in New Jersey, you may be wondering whether your job or employer will be able to find out that your wages are being cut into to pay off creditors.
Employers will always know that your wages are being garnished. This is because the portion of your pay that is used to pay off creditors is taken directly from your paycheck before you ever get it. Therefore, your employer knows that you have a garnishment because they need to know how much to take out of your pay to transfer to your creditors.
If you need legal assistance, call our New Jersey bankruptcy lawyers from Young, Marr, Mallis & Associates at (609) 755-3115.
Do New Jersey Employers Know About Wage Garnishment?
Your employer will always know that your wages are garnished in New Jersey. However, this will not necessarily put your job in jeopardy.
Making sure that wage garnishments are complied with can be demanding and frustrating for employers. The natural inclination, then, is to let go of the employee with garnished wages. Because of this, there are Federal laws that prohibit employers from firing people because they have garnished wages. 15 U.S.C. § 1674 prevents employers from laying off employees for “any one” indebtedness. So, it is undisputed that if you have one wage garnishment, you will not be able to be fired. However, if you have multiple garnishments from multiple creditors, the situation may be more complicated and should be examined by our New Jersey wage garnishment lawyers.
How Do Wage Garnishments Work in New Jersey?
Wage garnishments are when the court orders a portion of your paycheck to be directly paid to creditors to satisfy debts.
To get a wage garnishment against you, creditors first have to go to court. What happens is that the creditor files a complaint with the court alleging that you owe them money and have not paid them. In order to have a garnishment put in place, the creditor needs a “money judgment” from the court, which is essentially the judge stating that the creditors are allowed to take your money (in ways that the law allows, of course). A creditor can get a money judgment for a number of reasons. The two main reasons are that you did not show up to court to contest the complaint or lost at trial.
Now, if creditors had their way, they would probably try to take as much money as possible out of every paycheck you were supposed to get. However, New Jersey wage garnishment laws prevent creditors from taking above a certain percentage of your income. 15 U.S.C. § 1673 prevents any wage garnishment from exceeding 25% of that week’s disposable earnings. Your “disposable earnings” are what is left after your employer has removed what needs to be paid in taxes and some other fees.
While 25% of a week’s earnings is a high amount, there are some other restrictions on what creditors can take out of your pay. Creditors cannot garnish your wages to such an extent that you are not able to pay for basic necessities like food or rent. Additionally, some forms of income, like military payments, cannot be garnished.
How to Prevent Wage Garnishment in New Jersey
If you are concerned about the effects of garnished wages, there are several ways that you can mitigate the effects of wage garnishment or prevent garnishment entirely. When you meet with our lawyers, we can determine which method is best for your particular situation.
File for Bankruptcy
One way to very quickly prevent wage garnishment from happening is to file for bankruptcy under the chapter that is most appropriate for your situation. When you file for bankruptcy, something called an “automatic stay” is immediately put in place that prevents creditors from taking money or assets from you. The idea behind automatic stays is to let debtors take a breather and have debts paid off in a way that is fair to both debtor and creditor.
Bankruptcy has different chapters that work differently and will benefit people in different situations. For example, Chapter 7 bankruptcy is designed to pay off creditors as quickly as possible. The trade-off is that very few assets can be protected and made off-limits from creditors under Chapter 7. Therefore, Chapter 7 bankruptcy is tailored to people who do not have many assets. Chapter 13 bankruptcy, on the other hand, lets debtors earmark certain things as protected from liquidation. However, Chapter 13 bankruptcy takes significantly longer to resolve itself than Chapter 7. It is important to consider your situation and weigh the benefits and drawbacks of filing for bankruptcy when considering that option.
The most obvious, but also realistically the most difficult, way to prevent or stop wage garnishment is to pay the debt. If creditors are not owed anything, they cannot take your income. That being said, the reality is that people facing wage garnishment may not be able to pay a debt right away, so it is not incredibly likely that this is a practical option. It is, however, an option nonetheless.
Talk With Our New Jersey Wage Garnishment Lawyers Today
Our Ocean County, NJ bankruptcy lawyers are ready to give free case reviews when you call Young, Marr, Mallis & Associates at (609) 755-3115.