Wage garnishment question???

[yabyum28]

I am going to be filing a chapt 7 over the next 12 months though I am concerned about wage garnishment in the mean time. I have 3 questions.

1) what is the max amt they can garnish?

2) is this the max amt of all of my debts or for each of my debts?

3) How will I know when they seek a judgment and then later a garnishment against me? Will I receive a court notice in the mail ahead of time to attend the court hearing for the judgment???

As I understand it, 25% of my CURRENT earnings is the total max garnishable amt based on federal law. I understand that if I owe a specific person money (such as a child or wife) this could be as high as 60%. Though I only owe money to corporations. Am I understanding the law correctly? The law is written in such formal jargon that it is difficult the lay person to follow.

Thanks for your help!

[HHM]

1. It depends on your state's wage garnishment law, but typically it's 25% per paycheck.

2. Again, depends on your state's law, but wage garnishment is typically first come, first served.

3. Yes, a creditor, in order to garnish your wages, needs to file a law suit against you in order to obtain a judgment. Thus, you will be get numerous notices during the process, assuming, of course, your creditors know where to find you.

Incidentally, why the long wait to file. Why not just file and get things moving.

For unsecured debts (i.e. credit cards), the creditors are fairly slow moving to file a law suit. Most don't even think about filing a law suit until 9+ months after your initial default, and some wait over a year. Notable exceptions are Discover Card and MBNA, they will usually retain an attorney within 6 months of your initial default.

[yabyum28]

thanks for the response

Hi HHM,

Thanks for the response. I just wanted clarification that I was interpreting the law correctly. Why am I waiting? Because I've looked at my income / current debt situation and have determined that I will qualify for Chapt 13 now though would qualify for Chapt 7 in about 3 months from now. The reason for this is because of a large decrease in pay over the last 4 months. since the BK court will look at my prior 6 months earnings to determine my 'current income'. Financially speaking it doesn't make sense for me to do a Chapt 13 and spend the next couple years paying a trustee when I can alleviate all my debt in the next 6 - 8 months. I am familiar with the pros and cons already of a Chapt 7 vs 13 and have determined that waiting a few months is the option for me.

[HHM]

Hi HHM,

Thanks for the response. I just wanted clarification that I was interpreting the law correctly. Why am I waiting? Because I've looked at my income / current debt situation and have determined that I will qualify for Chapt 13 now though would qualify for Chapt 7 in about 3 months from now. The reason for this is because of a large decrease in pay over the last 4 months. since the BK court will look at my prior 6 months earnings to determine my 'current income'. Financially speaking it doesn't make sense for me to do a Chapt 13 and spend the next couple years paying a trustee when I can alleviate all my debt in the next 6 - 8 months. I am familiar with the pros and cons already of a Chapt 7 vs 13 and have determined that waiting a few months is the option for me.

Sounds good to me.