The “ifs and buts” concerning wage garnishment when filing for Bankruptcy

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The “ifs and buts” concerning wage garnishment when filing for Bankruptcy

When you file for bankruptcy, the automatic stay immediately stops any lawsuit filed against you and most actions against your property whether such action is taken by a creditor, collection agency, or government entity. The automatic stay may provide a powerful reason to file for bankruptcy particularly if you are at risk of being evicted, being foreclosed on, being found in contempt for failure to pay child support, or losing such basic resources as utility services, welfare, unemployment benefits, or your job because of wage garnishments..

Filing for bankruptcy stops garnishments dead in their tracks. Although no more than 25% of your wages may be taken to satisfy a creditor’s claim, many people file for bankruptcy once wage garnishment is threatened. But there are a few restrictions that are imposed on Wage Garnishments under section 1673.

Except as provided in subsection (b) of 1673 section and in section 1675 of this title, the maximum sum of the aggregate disposable earnings of an individual for any work week which is subjected to garnishment may not exceed 25 per cent of disposable earnings for that week, the amount by which disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a) of title 29.

However, there are few exceptions to these restrictions as well:

The restrictions of subsection (a) of 1673 section do not apply in the case of any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure which is established by state law, which is subject to judicial review and for any order of any court of the United States having jurisdiction over cases under Chapter 13 of Title 11. These restrictions can also be omitted in cases where there is any debt due for any State or Federal tax.

Also the maximum part of the aggregate disposable earnings of an individual for any workweek which is subject to garnishment to enforce any order for the support of any person shall not exceed-

· 50 per cent of individual’s disposable earnings for that week in case such individual is supporting his spouse or dependent child; and
· 60 per cent of such individual’s disposable earnings for that week where such individual is not supporting a spouse or dependent child described in clause (A); except that, with respect to the disposable earnings of any individual for any workweek, the 50 per cent specified in clause (A) shall be deemed to be 55 per cent and the 60 per cent specified in clause (B) shall be deemed to be 65 per cent, if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek.

For any question you have regarding Contra Costa Bankruptcy, please  call (925) 683-0464 for your free consultation with a highly qualified bankruptcy attorney at KorbLaw. They will help you evaluate all of your options as well as your candidature for filing a bankruptcy and will also help you with the legal proceedings. For more details you can log on to: www.KorbLaw.com


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For any help regarding bankruptcy issues you need to contact an expert Contra Costa Bankruptcy lawyer.  Contra Costa bankruptcy advisors are well informed of all the pros and cons concerned with Contra Costa Bankruptcy laws.
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