Wage Garnishment in California – How Bankruptcy Can Help
Dealing with wage garnishment can be a major headache; it’s stressful, and it puts a strain on your finances. But here’s the good news – if you live in California, filing for bankruptcy may be able to stop wage garnishment and give you a fresh start.In this article, we’ll dive into the details of how wage garnishment works in California, what bankruptcy can do to help, and some key things to keep in mind. We’ll also share some personal stories from clients we’ve helped get relief from garnished wages.
What is Wage Garnishment?
Wage garnishment is when a creditor (someone you owe money to) gets a court order that allows them to take a portion of your paycheck before you even see it. It’s a way for them to collect on unpaid debts like credit cards, medical bills, or even things like unpaid taxes or child support.In California, there are limits on how much of your wages can be garnished – but those limits don’t make it any less of a pain. Having your paycheck docked unexpectedly can really throw off your budget and make it tough to pay rent, buy groceries, or cover other essential expenses.
-How Bankruptcy Stops Wage Garnishment
One of the biggest benefits of filing for bankruptcy is that it can immediately stop most wage garnishments through what’s called an “automatic stay.” This is sort of like a forcefield that protects you from debt collectors as soon as your bankruptcy case is filed.With a Chapter 7 bankruptcy, eligible debts like credit cards, medical bills, and personal loans get wiped out entirely. So any garnishments related to those discharged debts have to stop.In a Chapter 13 bankruptcy, you get a chance to catch up on past-due debts like back taxes or child support through a court-approved repayment plan. While you’re making those payments, wage garnishment is put on pause.It’s important to note that not all types of debt are dischargeable in bankruptcy. But for the ones that are, that automatic stay can provide some serious relief from wage garnishment.
“When I came to Spodek Law Group, I was at my wits’ end with wage garnishment. It felt like I was working for nothing with how much was being taken out of my paycheck. Filing bankruptcy was a tough decision, but it gave me breathing room to get back on my feet financially.”
– Former Client, Los Angeles
Bankruptcy Exemptions Protect Your Income
In addition to stopping wage garnishment, bankruptcy also allows you to use “exemptions” to protect a portion of your income and assets. These exemptions vary by state, but in California they include:
- 75% of your wages/earnings (or the full amount if you’re the head of household)
- Equity in your primary residence, up to a certain amount
- Household goods, clothing, and other personal items
- Retirement accounts and pensions
- Tools needed for your job/trade
- Certain public benefits like Social Security, unemployment, and disability
So even if you have non-exempt assets or income that gets taken into the bankruptcy estate, exemptions help ensure you’ll have enough to cover basic living expenses and avoid things like wage garnishment going forward.
Timing is Important for Bankruptcy and Wage Garnishment
While bankruptcy can be a powerful tool against wage garnishment, timing is crucial. The sooner you file, the sooner that automatic stay kicks in to stop the garnishment.If you wait too long, your creditors may be able to take a big chunk of your wages before your bankruptcy case is filed. And in some situations, bankruptcy may not be able to claw back wages that were already garnished pre-filing.That’s why it’s smart to talk to an experienced bankruptcy lawyer as soon as you receive notice of a pending wage garnishment. They can assess your situation and advise you on the best strategy, whether that’s filing bankruptcy right away or exploring other options first.
-“I’ll be honest, I dragged my feet on dealing with my debt issues for way too long. By the time I contacted Spodek Law Group, my wages were already being garnished like crazy. While the bankruptcy helped stop it going forward, I really wish I had taken action sooner before so much was taken out of my paycheck.”
– Former Client, New York City
Other Bankruptcy Benefits Beyond Stopping Wage Garnishment
Of course, stopping wage garnishment is just one piece of the bankruptcy puzzle. Depending on whether you file Chapter 7 or Chapter 13, bankruptcy can also help:
- Eliminate credit card debt, medical bills, personal loans, utility bills, and other unsecured debts
- Allow you to get caught up on missed mortgage or car payments
- Remove second mortgages or home equity loans in some cases
- Deal with unpaid taxes through repayment plans or potential discharge
- Stop foreclosure proceedings and help you keep your home
- Prevent vehicle repossession and make your car more affordable
Basically, bankruptcy gives you a way to restructure or eliminate burdensome debts that are dragging you down. With that fresh start, you can focus on rebuilding your finances and avoiding issues like wage garnishment down the road.There are pros and cons to consider, but for many people, the ability to get out from under crushing debt makes bankruptcy an attractive option.
Bankruptcy Alternatives for Wage Garnishment
Bankruptcy isn’t the only possible solution if you’re dealing with wage garnishment in California. A few other options that may be worth exploring include:
- Debt Settlement: Negotiating lump-sum settlements with creditors for less than the full amount owed. This can remove the legal grounds for garnishment.
- Debt Consolidation Loans: Taking out a new loan to pay off multiple creditors at once. With everyone paid, garnishments should stop – but you’re still responsible for the new consolidation loan.
- Claiming Exemptions: In some cases, you may be able to claim federal bankruptcy exemptions or use California’s generous state exemptions to protect all or most of your wages from garnishment without filing bankruptcy.
Every situation is unique, so it’s wise to consult with an experienced debt relief attorney to understand all your options. They can look at the specifics of your case and finances to determine if bankruptcy, an alternative strategy, or a combination makes the most sense.
“I really appreciated how the Spodek Law Group took the time to understand my full financial picture and explain all my options – not just bankruptcy. In the end, debt settlement ended up being the right move for me and it stopped the garnishment quickly. But I’m glad I had all the facts before deciding.”
– Former Client, Los Angeles
How to Stop Wage Garnishment with Bankruptcy in California
If you do decide that bankruptcy is the best path forward, here’s a quick overview of how to get the process started and stop those garnished wages:
-- Gather Documentation: You’ll need info like pay stubs, bills, tax returns, etc. to prepare your bankruptcy filing.
- Take Credit Counseling: It’s required to complete a brief credit counseling course before filing.
- Prepare Bankruptcy Forms: An experienced lawyer can ensure your forms are filled out properly.
- File Your Case: As soon as your bankruptcy petition is filed and stamped, the automatic stay goes into effect to stop garnishments.
- Attend the Meeting of Creditors: You’ll answer questions about your finances under oath.
- Get Your Discharge: If all goes well, eligible debts will be discharged, officially ending creditors’ ability to garnish.
The whole process can take 3-6 months for a smooth Chapter 7 bankruptcy. Chapter 13 takes longer since you’re on a repayment plan for 3-5 years. But the garnishment relief kicks in right away.<a href=”https://www.avvo.com/legal-guides/ugc/the-bankruptcy-process-from-start-to-finish”>You can read more about the full bankruptcy timeline here</a>.
Finding the Right Bankruptcy Lawyer is Key
One of the most important factors in stopping wage garnishment through bankruptcy is having the right legal representation. You want to work with a bankruptcy attorney who:
- Has extensive experience in handling Chapter 7 and Chapter 13 cases
- Fully understands California’s bankruptcy laws and exemptions
- Will take the time to understand your unique financial situation
- Gives you a realistic assessment of what bankruptcy can and cannot do
- Makes you feel comfortable and keeps you informed throughout the process
At Spodek Law Group, we pride ourselves on providing that level of attentive, knowledgeable service. Our team has over 50 years of combined experience; we’ve helped countless clients in California put an end to wage garnishment and get back on solid financial footing.We offer free consultations, so you can discuss your situation with no obligation. We’ll go over the potential benefits and drawbacks of bankruptcy for your circumstances. If you decide to move forward, we’ll be by your side every step of the way.
-“I can’t say enough good things about the team at Spodek Law Group. They made the whole bankruptcy process so much less stressful than I expected. And being able to keep my full paycheck after the garnishment stopped was life-changing.”
– Former Client, Los Angeles
Key Takeaways on Wage Garnishment and Bankruptcy
We’ve covered a lot of ground, so let’s summarize the key points:
- Wage garnishment in California can be a major burden; it restricts your income and makes it tough to cover living expenses
- Filing for Chapter 7 or Chapter 13 bankruptcy can immediately stop most types of wage garnishment through the automatic stay
- Bankruptcy also allows you to use exemptions to protect a portion of income/assets
- Timing is crucial – the sooner you file, the sooner garnishments stop and the less you’ll lose
- Bankruptcy provides additional debt relief beyond just stopping garnished wages
- Alternatives like debt settlement may be an option, depending on your situation
- Having an experienced bankruptcy lawyer on your side is critical for navigating the process successfully