Losing a portion of your wages can turn your financial hardship from bad to worse. You may also feel helpless going up against a creditor or court threatening to take your wages.
There are Arizona laws protecting your rights against unreasonable or unlawful wage garnishment. Knowing the law can help you negotiate or stop the garnishment. If your options are exhausted, your bankruptcy attorney can stop wage garnishment in its tracks. Let’s take a closer look at Arizona state and federal garnishment laws you should know about.
Arizona Revised Statutes (ARS) 33-1131 governs wage garnishment in Arizona. It limits how much of your earnings can be garnished by creditors, allowing you to retain enough wages to cover basic living expenses.
ARS 13-1131 does the following:
ARS 33-1131 protects you by ensuring that creditors cannot take an excessive amount of your wages through garnishment. The law also provides a mechanism for reducing garnishment further if you can demonstrate extreme financial hardship. It safeguards your employment by prohibiting employers from terminating you based on a single wage garnishment.
ARS 12-1598 sets the wage garnishment process in Arizona. It outlines the procedures creditors must follow to garnish wages and defines key terms related to garnishment. The statute also protects you and limits how much of your earnings can be garnished.
ARS 12-1598 works in the following ways:
ARS 12-1598 reduces garnishment in cases of extreme financial hardship so you retain more of your earnings. The law also requires creditors to follow specific legal procedures before garnishing your wages so that you can contest the garnishment. It protects certain types of income, such as social security benefits, from garnishment entirely.
The Consumer Credit Protection Act (CCPA) is a federal safeguard for consumers (you) and employees. It regulates lenders such as banks, credit card companies, personal loan lenders, leasing firms, and others. It establishes proper credit reporting, prohibits deception and discrimination, and sets transparency guidelines for lenders. It further limits the amount of your earnings that can be garnished. The CCPA helps you retain enough of your wages to support yourself or your family, even when facing wage garnishment.
The Consumer Credit Protection Act does the following:
The CCPA protects you by ensuring that a significant portion of your wages remains available for living expenses, even when facing garnishment. It limits the amount that can be garnished, preventing creditors from taking an excessive portion of your earnings. The law also provides job protection by prohibiting employers from terminating you based on a single wage garnishment.
Proposition 209 (Predatory Debt Collection Protection Act) is a voter-approved initiative in Arizona that went into effect on December 5, 2022. It protects you from excessive debt collection practices, particularly for medical debt. The law modifies interest rates on medical debt, increases property exemptions from debt collection, and reduces the amount of wages that can be garnished.
Proposition 209 does the following:
Proposition 209 protects you from excessive wage garnishment by limiting creditors to taking only 10% of your disposable earnings, so you retain more of your income. It shields more of your assets from debt collection by increasing exemption amounts for your home, vehicle, and household goods. The law also prevents medical debt from spiraling out of control by capping interest rates at 3%.
Upon filing a Chapter 7 or Chapter 13, an “Automatic Stay” is issued under the Federal Bankruptcy code, 11. U.S.C 362. It is a powerful stay, stopping all forms (with some exceptions) of legal actions against you.
Overall:
Don’t let wage garnishment hurl you into financial hardship. Contact our bankruptcy law firm for a free consultation, and let us help you keep your wages. Fill out our online form or call Stone Rose Law at (480) 498-8998 to speak with a Scottsdale bankruptcy attorney.
