Legal Help for Stopping Wage Garnishment

Helping Clients Through the Legal Process of Wage Garnishments to Help Them Secure a Better Financial Future

Losing any amount of income from your bank accounts can be difficult, if not impossible, to overcome. When you are already struggling to make ends meet, the idea of your bank account taking an unexpected hit can worsen your struggle and make it feel insurmountable. Unfortunately, this may be exactly the scenario you are dealing with if you face wage garnishment.

When your wages are garnished, your employers take a certain amount of your paycheck to pay off outstanding debts, child support payments, spousal support, back taxes, and other debts. The money taken from the employee’s paycheck is then either sent to a Michigan court or to the creditor directly.

While Michigan law protects most of your paycheck from wage garnishment, the amount that a creditor or a court may collect could depend on how much you earn and how much disposable income you have. If you are facing a court order of wage garnishment, it is strongly recommended that you retain professional legal representation from experienced attorneys.

Our law firm has extensive experience helping clients with debt relief options, wage garnishment cases, bankruptcy cases, and more. Our legal team operates on a contingency fee basis, meaning that you will not owe us anything in terms of legal fees unless we are successful in your wage garnishment case. Additionally, we offer free consultations to prospective new clients interested in retaining our legal services. To learn more about how we may assist you if you are facing a wage garnishment order, please contact us to schedule your free initial consultation today.

What is a Wage Garnishment?

Wage garnishment is the legal process where a portion of an individual’s paycheck or disposable earnings is withheld by their employers to pay off certain debts owed to creditors or the courts. For many barely making ends meet and already dealing with an overwhelming debt obligation, the notion of having your wages garnished by a court order can be especially difficult to bear.

In most cases, the debt owed to creditors will not be automatically transferred from your paycheck without the creditor first suing you in court and winning a court judgment. This means that the creditor or party owed money will have to go through the legal process of getting permission from a judge for wage garnishment.

If you miss payments on medical bills or other debt obligations, creditors could collect money from your paychecks if they win a court judgment. There are, however, exceptions to the court rules and wage garnishment laws. For example, certain creditors like the IRS for unpaid taxes, the government for federal student loans, or you owe child support or alimony to another party, it is possible to collect money from your paycheck without first suing you.

Who Can Garnish Your Wages?

Creditors, debt buyers, and debt collectors can all garnish your wages, but they must first be awarded a court judgment against you. The federal government may also garnish your wages for unpaid federal taxes and defaulted federal student loans, but they needn’t sue you first. If you owe child support or spousal support; your wages can also be garnished without the need for a court judgment.

Debtors who owe taxes to the state of Michigan may also find their wages garnished by the state government. The Collection Services Bureau can take money directly from your bank account without the need for a court order.

There are legal limits on how much can be garnished by any of these parties. To discuss your financial situation in more detail, please contact our wage garnishment attorneys for legal guidance.

What Are Examples of Wage Garnishments in Michigan?

Michigan’s laws for wage garnishment enable creditors to collect money from the Consumer Credit Protection Act, bank accounts, land contract payments and rent payments, and Michigan income tax refunds.

Common causes of wage garnishment in the state of Michigan include the following:

• Unpaid debts
• Tax debt
• Defaulted student loans
• Spousal support
• Child support payments

While a bankruptcy filing may forgive certain debts, there are other debts that are non-dischargeable in bankruptcy. These include certain taxes, child support, alimony, student loans, court fines and penalties, debts arising from fraud, restitution orders, personal injury debts, cooperative housing fees, and those resulting from malicious injuries.

How Much of Your Wages Can Be Garnished in MI?

The total amount of creditor money that can be secured in debt collection cannot exceed the court judgment, plus fees, costs, and accrued interest. There are also other limits that prevent creditors from taking over a certain amount from each paycheck. Michigan laws are similar to the federal law for garnishment limitations. In most cases, creditors can garnish the lesser of the following in any given pay period: 25% of your weekly disposable earnings (which is your gross wages minus any legally required deductions like Social Security income or taxes) or the amount by which your income exceeds 30 times the federal minimum wage.

The wages that may be garnished for child support, federal student loans, and back taxes follow different formulas. There may also be certain exemptions to wage garnishments. For example, a creditor is not allowed to take income that is exempt from wage garnishment. Exempt income may include Social Security payments, workers’ compensation benefits, Supplemental Security Income, payments from individual retirement accounts, and state disability assistance.

If your income exceeds 30 times the federal minimum hourly wage or you have up to 25% of disposable finances, Michigan wage garnishment laws will secure a lesser amount for creditors.

How to Stop Wage Garnishment in Michigan?

Once a creditor secures a court judgment against you, they must wait 21 days to get a garnishment order. During those 21 days, you can avoid garnishment by paying off the creditor before the time runs out. However, in many cases, a debtor fails to pay off their debt within 21 days. If it is not possible for you to repay your debts within 21 days, there are options for avoiding wage garnishment by reaching a payment arrangement with the creditor. For example, you may reach a payment plan that allows you to settle the debts with a lump sum that is less than the full amount owed, as compared to making periodic garnishments. You may also consider working out a voluntary payment arrangement that doesn’t involve periodic garnishment.

If you’ve been served a writ of garnishment and object to the order, you may wish to consider retaining professional legal counsel from experienced lawyers. Once a writ of garnishment has been awarded to a creditor, it can be difficult to undo but not impossible. There are several objections that could be made to the court that could overturn the writ of garnishment.

Your objection must be based on one or more of the following:

• Garnishment is barred by an installment payment order
• The garnishment is invalid
• The wage garnishment was not properly issued
• The judgment has already been paid
• Wage garnishment is precluded due to bankruptcy proceedings
• Your funds or property are exempt from wage garnishment by specific laws

Is Filing for Bankruptcy Right for Your Legal Needs?

Depending on the financial hardship you are facing, it may be worth considering filing for bankruptcy.

After you file for Chapter 7 or Chapter 13 bankruptcy, wage garnishment can be halted. This is accomplished by the automatic stay issued by a bankruptcy court. Automatic stays prevent creditors from pursuing payments or making debt collection attempts.

Once Chapter 7 bankruptcy goes into effect, it typically discharges most unsecured debts.  In Chapter 13 bankruptcy proceedings, you are allowed to pay off your debts with a monthly repayment plan, after which the remaining balance will be discharged.

Wage garnishment can be stopped as soon as you file for bankruptcy. However, filing for bankruptcy should not be taken lightly or decided on hastily. Please contact our wage garnishment attorneys to discuss your bankruptcy case and learn your legal options today.

Schedule a Free Consultation with an Experienced Michigan Wage Garnishment Lawyer Today

A wage garnishment order can disrupt your financial stability. Thankfully, there are several solutions to wage garnishment orders, including payment plans, filing bankruptcy, and challenging the writ of garnishment. We strongly encourage you to work with a wage garnishment attorney for legal guidance as you go through the process of trying to stop wage garnishment as you attempt to settle your financial obligations.

Our legal team has years of experience representing clients and complex financial situations. We will be proud to represent your interests as you seek to challenge your wage garnishment orders or seek a solution that could secure your financial stability.

To learn more about how we may assist you during this difficult scenario, please contact our law office to schedule your free consultation today. You may reach us at 248-671-6794.