If part of your paycheck is being sent to a creditor, losing even a small percentage of your wages can make an already difficult budget harder to manage. You may be trying to cover your mortgage or rent, utilities, groceries, and other bills while a past debt is now taking money directly from your income.
A debt relief lawyer can help you determine why the garnishment is happening, whether the amount follows New York law, and whether bankruptcy or another debt option could address the underlying problem. Dantzman & Dantzman works with individuals in Kingston and throughout the Hudson Valley who are facing wage garnishment and other forms of creditor collection.
Quick Answer: How Can a Debt Relief Lawyer Stop Wage Garnishment?
A debt relief lawyer can review the debt, judgment, income execution, and your overall finances to determine what options are available. Filing Chapter 7 or Chapter 13 bankruptcy generally creates an automatic stay that stops most wage garnishments and other collection actions while the stay remains in effect. Whether bankruptcy makes sense depends on the type of debt and the rest of your financial situation.
What Happens Before a Creditor Takes Money From Your Paycheck?
For many ordinary judgment debts in New York, wage garnishment is handled through a process called an income execution. New York law generally requires the sheriff to serve the income execution on the person who owes the judgment first. The debtor is directed to begin making the required payments to the sheriff. If those payments are not made for 20 days after service, the sheriff can generally serve the income execution on the person or organization providing the income, which may be the debtor’s employer.
That distinction can matter if you recently received paperwork but your employer has not started withholding wages yet. Waiting until payroll deductions begin may mean allowing an existing collection process to move another step forward.
Under the current New York statute, an income execution cannot exceed 10% of gross income, and further restrictions apply based on disposable earnings. The law also prevents income executions for certain judgments arising from medical debt actions brought by hospitals or health care professionals.
How Does Bankruptcy Change an Active Garnishment?
Bankruptcy addresses something that simply adjusting a household budget cannot: the creditor’s legal ability to continue many collection activities.
With the filing of a Chapter 7 bankruptcy, an automatic stay goes into effect. While the stay applies, most creditors cannot continue lawsuits, garnishments, collection calls, or similar efforts to collect debts that arose before the bankruptcy filing. There are certain exceptions to this general rule that our law firm will examine when you come in for your consultation.
Even if your wages are already being garnished, the bankruptcy case filing can cease all future garnishments, and in some cases, where the creditor has received preferential garnishment amounts, those can sometimes be recouped for our clients. Chapter 7 may be worth considering when unsecured obligations such as credit cards, personal loans, or other dischargeable debts have become unmanageable, and the person otherwise qualifies to file.
The garnishment itself is only part of what we review. If stopping one creditor would still leave you unable to keep up with several other debts, it makes sense to look at the entire financial picture rather than treating the paycheck deduction as an isolated problem.
Chapter 7 vs. Chapter 13 When Your Wages Are Being Garnished
Chapter 7 and Chapter 13 can both provide automatic-stay protection, but they solve financial problems differently.
Chapter 7 is generally focused on discharging qualifying debts for eligible filers. It can be useful when someone has significant unsecured debt and does not have enough available income to realistically repay it. Income, expenses, property exemptions, and the types of debt involved all need to be reviewed before deciding whether Chapter 7 fits.
Chapter 13 allows the debtor to develop a repayment plan under a court-approved restructuring plan that lasts three to five years. It can be especially relevant when the person has regular income but needs time and legal protection to deal with several financial issues at once, such as a wage garnishment along with missed mortgage or vehicle payments. It can also help protect non-exempt assets.
Each chapter can offer its own unique benefits, and one is not automatically better than the other. We review those differences with you, explaining the benefits and requirements of each before recommending a filing strategy.
When This Matters for Kingston Residents
It may be worth speaking with an attorney before the first paycheck deduction if you have already received an income execution. The period between receiving the paperwork and having an employer served can be important because it gives you an opportunity to understand what the creditor is doing and what legal options may still be available.
It is also worth looking beyond the garnishment when the rest of your finances are beginning to break down. A Kingston resident who is facing a judgment while also falling behind on credit cards, loans, a mortgage, or other obligations may need a broader solution than simply finding room in the budget for another payment.
On the other hand, bankruptcy may not be necessary in every wage-garnishment situation. If the debt is manageable, the income execution can be properly addressed another way, or if the deduction involves an obligation that bankruptcy treats differently, another option may make more sense.
Dantzman & Dantzman provides Kingston bankruptcy help for individuals in Ulster County who are considering Chapter 7, Chapter 13, or other debt relief options. Our office is located in Poughkeepsie and serves clients throughout the Hudson Valley.
Stop the Garnishment From Becoming a Bigger Debt Problem
A wage garnishment is often a sign that a creditor has moved beyond notices and collection calls and is actively enforcing a debt. Addressing that process early can give you a clearer picture of what is being withheld, what legal protections apply, and whether the underlying debt problem needs a broader solution. A judgment can also become a lien on real property, such as your home, so we will look at steps to prevent that from happening or to address a judgment lien if it has already been placed.
Dantzman & Dantzman has helped Hudson Valley residents with bankruptcy and debt relief. We have helped individuals and families achieve financial freedom and a fresh start since 1998. If you are looking for a debt relief lawyer because wages are being garnished in Kingston, contact our office for a free consultation so we can review what is happening and explain the options that may apply to your situation.