One of the ways a creditor can enforce payment is to get a court order to deduct money from your paycheck. Although this action is legal, it’s not always feasible if you’re going through financial hardship. Fortunately, there are ways to stop garnishing your paycheck, such as hiring a Scottsdale bankruptcy attorney.
Below, we look at what garnishment is, how it impacts your finances, and how to stop wage garnishment immediately.
Wage garnishment is a legal process where a creditor deducts money directly from your paycheck to repay a debt you owe.
In Arizona, creditors must obtain a court judgment before garnishing your wages. You can expect up to 25% of your disposable earnings to be garnished for most debts.
However, some Arizona laws protect parts of your income from garnishment (read more below). You may also claim exemptions to stop creditors from taking your wages. Federal and state laws limit how much can be garnished. Your employer must comply with garnishment orders but cannot fire you for a single garnishment.
Nearly any type of creditor can request wage garnishment from the court if you fail to repay your loan or get too far behind on your payments. However, each type of debt may have a different path to garnishments. Here are some common debts that can lead to wage garnishment:
| Unpaid credit cards | Medical bills |
| Student loans | Unpaid taxes |
| Child support | Alimony |
| Court costs | Consumer debts |
It’s easy to say that paying off the debt will stop wage garnishment. However, you wouldn’t be reading this if you could pay off the debt. So, let’s look at four other effective ways to stop wage garnishment in Arizona.
Most creditors try to avoid taking legal action when debts are overdue. Why? Because it’s just as much a hassle for them as it is for you. Plus, it doesn’t look good on their books. For this reason, they may consider renegotiating the terms of the debt.
Here’s how to renegotiate a payment plan to avoid wage garnishment:
Consider offering a lump sum payment in exchange for more favorable terms. If the creditor agrees to a new plan, get the agreement in writing. Be sure to follow through with the new payment schedule to avoid further collection actions.
Avoid debt settlement companies. They can ruin your credit. Some companies run scams that can hurt you financially. If the creditor is unwilling to negotiate, get help from a credit counseling agency or consult a Scottsdale bankruptcy attorney to explore other options for avoiding wage garnishment.
Challenging a wage garnishment in court in Arizona can protect your income if you feel the garnishment is unwarranted or unfair. A wage garnishment lawyer can help you through the legal process. Here’s an overview of how it works:
In Arizona, you have ten business days to file a Request for Hearing form to object to a wage garnishment after your employer files the Garnishee Answer and gives you a copy. You have 15 days to file your objection if you receive the documents by mail. Your attorney can help you fill out and submit the documents to ensure they are filed by the deadline.
Filing for bankruptcy can stop wage garnishment in Arizona. Both Chapter 7 and Chapter 13 bankruptcies apply and can trigger an automatic stay to halt creditor collections. The stay occurs immediately upon the filing of your case.
The process may look like this:
Note: Although bankruptcy can stop most wage garnishments, some exceptions exist for child support, alimony, certain taxes, debts owed to other government agencies, student loans, court fines, and civil penalties. Ask your attorney about your options if you fall into either of these categories.
You may filing a claim of exemption by requesting for a hearing in response to the wage garnishment. This is where you will claim that some or all of the money being garnished is “exempt” money. You may reduce or eliminate the amount creditors can take from your paycheck by claiming these exemptions.
Follow these steps to file a claim of exemption:
Filing a claim of exemption doesn’t guarantee the garnishment will stop permanently. The court will review your situation and decide. If you retain an attorney, they can act on your behalf to submit the documents and present your position to the court.
Bankruptcy will halt the garnishment immediately upon filing and discharge the debt (if it is dischargeable) – meaning it will never be collectible after the bankruptcy is complete. An experienced bankruptcy attorney will advise whether you should consider the above options and their implications. They will further determine if bankruptcy is your best option.
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.
