The total consumer debt in America hit $4 trillion in February 2019. With an average credit card balance of over $4,000 and approximately 10% of disposable income going to debts other than mortgages, many Americans are struggling to stay afloat. If you have fallen behind on payments, your creditors may use wage garnishments to collect the debt owed to them. Although Georgia law limits how much they can take, wage garnishments can still make a challenging financial situation even more difficult.
Wage Garnishment Laws
Georgia follows federal wage garnishment laws, which means that most creditors are limited to taking a maximum of 25% of your disposable income and must have a court judgment against you before taking action. Under the law, disposable income is your earnings minus any required deductions, such as taxes. Any voluntary deductions, such as health insurance or retirement contributions are considered disposable income. However, if you have failed to keep up with your income tax, child support, or student loan payments, your wages can be garnished without the court’s involvement. These debts can also be garnished at different rates:
- Child Support: Up to 50% of disposable income if supporting a spouse or child in addition to the one to receive the child support; up to 60% if not supporting a spouse or another child
- Student Loans: Up to 15% of disposable income
- Income Taxes: Variable, depending on the number of dependents and your tax deductions
If you have multiple garnishments, all added together cannot exceed 25% of your disposable income, with the exception of child support. This means that some creditors will have to take a smaller percentage over a longer period of time to collect enough to satisfy the debt.
Stopping Wage Garnishment
Declaring a chapter 7 or chapter 13 bankruptcy puts an immediate stop to wage garnishments and other debt collections, allowing you to keep your money while you create a plan for getting back on your feet. In some cases, your creditors may even be forced to return some of your already garnished wages to you.
You should contact an attorney to begin the bankruptcy process as soon as possible because you will be required to complete some steps prior to being allowed to file for bankruptcy. You must undergo credit counseling within six months prior to filing bankruptcy. Additionally, you will be required to file:
- An itemized list of your current income
- Major transactions over the last two years
- Monthly living expenses
- Property owned and any deeds or titles related to it
- Tax returns for the past two years
- An itemized list of debts and any relevant loan paperwork
This paperwork may take some time to compile, so your attorney will assist you in starting this process as soon as you decide on bankruptcy.
Contact an Attorney
Do not let debt and wage garnishments rule your life. Contact the attorneys at Lankford & Moore Law as soon as possible. Let us help you keep more of your money and get back on your feet.