A garnishment is a serious situation. Ignoring a garnishment can hurt you. Generally speaking, a garnishment is a type of legal proceeding that allows someone you owe to seize your non-exempt property to satisfy a debt. In Mississippi, the usual targets of a garnishment are a percentage of your wages and all of your bank account balances (up to the amount you owe) which may be seized without your permission for payment on a debt. A common and serious problem with bank account seizures is that such seizures commonly occur with joint accounts. So, if you are a joint account holder with someone else, their money is often taken along with yours to satisfy the debt. Further, current Mississippi law does not limit the type of property that may be subject to garnishment. So, garnishments aren’t necessarily limited to wages and bank account balances. Garnishments can wreak havoc on your monthly finances and deprive you of money you need for basic necessities such as food, medicine, clothing and shelter. Having your wages garnished for more than one single debt may lead to loss of employment.
The good news is that there are effective options available to you. But, you must act quickly. The worst possible thing you can do in the face of a garnishment is to ignore it and procrastinate. Immediately seek legal advice from a competent and experienced debt relief attorney so that your situation can be properly analyzed and appropriate action can be taken. Don’t listen to the stories others tell you about how they have handled (or would handle) a garnishment. For some reason, garnishments have a place in the popular imagination and, in over two decades of law practice, I have heard some of the most incredible tales about garnishment situations and how they are to be resolved. While quite entertaining, these tales are always based on myth and misinformation about this simple, but powerful, way to collect a debt. Below are a few general things to think about if you are facing (or about to face) a garnishment. Again, however, the need for immediate and competent legal advice cannot be overemphasized. Self-help in this situation is dangerous and may make matters even worse.
Do I earn enough for my wages to be subjected to a garnishment?
There is a federal law known as the Consumer Credit Protection Act which limits the amount of wages that can be subject to garnishment. This law applies in all fifty states, the District of Columbia, and all U.S. territories and possessions. To determine how these limits apply in your situation, you must determine your “disposable” income. Basically, your “disposable” income is your total gross income minus all legally required deductions such as federal, state, and local taxes, Social Security (a/k/a FICA), and certain retirement deductions. The amount left after these deductions is your “disposable” income. You CANNOT deduct amounts for insurance, union dues, charitable contributions and some types of retirement plan contributions or other purely voluntary deductions when calculating “disposable” income.
If your disposable income does not exceed $217.50 weekly, $435.00 bi-weekly, $471.25 semi-monthly, or $942.50 monthly, then your wages are fully exempt from garnishment and cannot be taken to satisfy a debt. However, if you get a raise and your wages exceed these exempt amounts, then a portion of your wages can be taken as calculated below.
You can calculate the amount that can be taken from you in a garnishment.
First, determine how frequently you are paid. Weekly? Bi-weekly (every other week or 26 times per year)? Semi-monthly (always just twice per month or 24 times per year)? Monthly? Second, determine your disposable income as discussed above.
- If your disposable weekly income is more than $217.50 but less than $290.00, the amount of the garnishment is equal to the amount of your wages in excess of $217.50.
- If your disposable bi-weekly income is more than $435.00 but less than $580.00, the amount of the garnishment is equal to the amount of your wages in excess of $435.00.
- If your disposable semi-monthly income is more than $471.25 but less than $628.33, the amount of the garnishment is equal to the amount of your wages in excess of $471.25.
- If your disposable monthly income is more than $942.50 but less than $1,256.66, the amount of the garnishment is equal to the amount of your wages in excess of $942.50.
- If your disposable income is greater than $290.00 weekly, $580.00 bi-weekly, $628.33 semi-monthly, or $1,256.66 monthly, then the amount of the garnishment is equal to twenty-five percent (25%) of your disposable income.
- If the garnishment is to collect child support or alimony, the percentage amount can be as much as sixty percent (60%) plus an additional amount for any child support or alimony arrearage.
Remember, though, that wages are not your only asset that may be subject to garnishment. The fact that your wage income may not be enough to be subject to garnishment does not mean that other assets, like bank account balances, are not subject to garnishment.
Is the garnishment properly issued under state or other applicable law?
In most circumstances, a garnishment must be preceded by a court judgment. In other words, before the person you owe can garnish your wages or accounts, they must have first obtained a court judgment against you. Before any such judgment can be handed down, you must have been sued and given proper notice that you were being sued. So, if you’ve been hit out of the blue with a garnishment, it’s possible that proper garnishment procedures have not been followed and you may be able to defend yourself against the garnishment on this basis.
Again, this is not a defense that you can undertake yourself and you will need competent legal advice. Also, be aware that certain types of creditors are not required to take you to court first. For example, if you are being garnished for student loan debt, your wages can be subject to an “administrative” wage garnishment. These procedures are governed by federal law and do not require a lawsuit or trip to court before your wages are taken.
It is possible, but not likely, that your garnishment was initiated in violation of state law. However, if you are certain that you never received any notice whatsoever of being sued and the debt you owe (or allegedly owe) is not subject to an “administrative” or other non-judicial garnishment, you may have become a victim of a “debt buyer” type lawsuit. With a little investigation, a competent debt relief lawyer can determine if this has happened to you. If so, you may have defenses to the garnishment based on problems with that particular type of lawsuit.
The primary advantage of examining whether the garnishment is proper under state or other applicable law is that, if you can successfully challenge the garnishment, you don’t have to consider more drastic measures to deal with the situation.
The primary disadvantages to examining whether the garnishment is proper under state or applicable law include time and expense. By the time you receive notice of a garnishment, there is usually little additional time for competent legal counsel to investigate the validity of the garnishment. Any time spent investigating the validity of the garnishment effectively counts against you. And if it is determined that the garnishment was properly issued, you’ve spent valuable time and have nothing to show for it. In other words, you’re still about to lose wages and/or money from your bank accounts because of the garnishment. Additionally, you will incur legal fees in having a competent debt relief lawyer look into the matter for you. Although these fees aren’t likely to be very substantial, this money might be better spent elsewhere because, if it turns out that the garnishment was validly issued, you don’t get back those legal fees and you’re still at square one.
Does Chapter 7 bankruptcy or Chapter 13 debt consolidation have any effect on a garnishment?
Yes. Simply put, either of these formal debt relief options will instantly stop a garnishment no matter what your situation may be. And, it doesn’t matter where you are in the garnishment process. For example, if the garnishment is in place and about to take effect, formal debt relief will stop it from taking effect at all. If the garnishment has already started, the garnishment must stop immediately upon the filing of a case under Chapter 7 or Chapter 13. This means that even if you have lost money to the garnishment in the past, you can prevent any more loss from occurring. Additionally, in Mississippi, a competent consumer bankruptcy lawyer can usually get back funds taken from you within a few days of the filing of your Chapter 7 or Chapter 13 case. One notable exception to immediately stopping the garnishment is where you’ve had two or more bankruptcy cases pending within one year of the date you file your case to stop the garnishment. But, even in such circumstances, a competent consumer bankruptcy lawyer will know how to take additional steps to protect you and your property from the garnishment.
An additional and substantial benefit you derive from formal debt relief under Chapter 7 or Chapter 13 is complete protection from ALL of your creditors, not just the creditor trying to garnish you. A Chapter 7 case completely eliminates most types of unsecured debt while a Chapter 13 case allows you to formulate an affordable repayment plan that covers all your debt, not just the one that led to the garnishment. But either way, you are fully protected from the garnishment and all other debt collection attempts that might be directed towards you. And, at the end of your case, you are either completely debt free or in much better financial shape that you were at the beginning.
So, the bottom line is that if you are facing a garnishment, get competent legal advice right away! You are most likely facing an imminent and significant loss of money or other property if you fail to take immediate and proper action. If you are facing a garnishment, we can arrange a free, emergency consultation for you to meet with one of our attorneys. Our attorneys are competent and experienced debt relief attorneys who can promptly and accurately assess your situation and take prompt action to protect you.