Wage Garnishment: How Crafty Creditors Can Dip into Your Paycheck
The current economic environment is anything but friendly to the average American. In these tough times, it is easy for just about anyone to fall behind on payments. Yet, even though thousands are facing financial difficulties, the average consumer may not be aware of important legal tools within the reach of those to whom they owe money.
Wage garnishment is a potentially powerful option for creditors looking to collect on a debt. But, while creditors can clothe themselves in legal authority to withhold money directly from a worker’s paycheck, well-informed Tennesseans, with assistance from Nashville garnishment defense lawyers, also have potent legal weapons at their disposal which can help them fight for the right to hang onto the money they have earned.
What Kind of Debts May be Collected through Wage Garnishment in Tennessee?
If your wages are garnished, a portion of your pay is withheld by your employer. Your employer has no choice but to comply with a court-issued writ of garnishment, and your withheld wages are allocated to creditors who have successfully obtained a court judgment against you.
Standards for wage garnishment are set by both federal and state law. This means garnishment regulations vary from state to state.
In Tennessee, wages may be garnished in order to secure payment on a number of different types of obligations. Among other things, after going through the proper legal procedure, creditors can garnish your wages to collect unpaid credit card or loan balances, past due alimony or child support, back rent, and monetary judgments entered against you in previous civil court cases.
The Wage Garnishment Process
To begin the wage garnishment process, a creditor files a lawsuit to collect on your debt. You will be subsequently served with a summons and other court papers notifying you of the lawsuit. Even though these papers may allude to a court date weeks in the future, it is very important not to simply set them aside until that date approaches.
If you do not respond to the summons and complaint with your own legal documents within a given period of time, a creditor may obtain a default judgment against you in advance of the scheduled court date. Although there are other potential remedies you can pursue to stop garnishment after the fact, a default judgment means that you have forfeited your right to defend yourself against wage garnishment before a creditor starts siphoning funds directly from your paycheck.
Even if you do respond effectively to a summons and complaint, the facts of your case may ultimately fall in favor of your creditor. Whether wage garnishment results from a default judgment or the full court process, however, there are certain limitations on how much of your pay can be withheld.
Income Which is Exempt from Garnishment in Tennessee
Tennessee adheres to the federal standard that allows a typical creditor to take no more than 25 percent of your disposable wages, or the amount by which your weekly income exceeds 30 times the minimum hourly wage. Tennessee also increases this exemption by $2.50 per week for every dependent child you care for.
In addition to wage garnishment, there are other types of garnishment actions that can be taken against assets controlled by third parties (for instance, bank account garnishment). But, a broad range of employment or income-related benefits are shielded from wage or any other kind of garnishment in Tennessee. Pensions and other types of retirement benefits, most kinds of public assistance (workers’ compensation, unemployment, veteran’s benefits, etc.), and health, accident, or disability insurance payouts are all generally protected from garnishment under Tennessee law.
Dealing with the Financial Difficulties of Garnishment
Wage garnishment result in a significant financial hardship. There are several legal avenues you can explore which may be of use in keeping your hard-earned money where it belongs: in your pocket.
With the timely assistance of a Nashville garnishment attorney, you can file a response to the original summons and complaint to fight a garnishment action. You may also challenge a garnishment after final judgment has been rendered on certain grounds, such as an error in the original proceeding or an argument that the income being withheld should be fully or partially exempt from garnishment.
Yet, sometimes these actions are not enough; wage garnishment is usually a symptom of greater underlying credit issues and debt problems. For many struggling consumers, bankruptcy can be an attractive solution.
An automatic stay is an aspect of bankruptcy that stops all creditor actions against you, including wage garnishment, as soon as you file for bankruptcy. While the automatic stay can help you keep all of your wages in the short term, bankruptcy also addresses more ongoing financial concerns through mechanisms like debt discharge. And, although consumers are often not aware of it, many types of assets are protected from creditors in bankruptcy, meaning fears of losing your home or other important property in a bankruptcy case are often baseless.
If your wages have been garnished or you are otherwise struggling to make ends meet, it may feel like you have nowhere to turn. But, with the right legal assistance, there are plenty of options that can help you get your financial life back on track. Contact a bankruptcy attorney today to explore all your potential debt relief solutions.