There are places (they call those “debtor-friendly”states) that don’t permit wages to be garnished. Unfortunately Indiana, where I have been a debt consolidation lawyer for more than 26 years, is not one of those.
In Indiana, wage garnishment is authorized by a court order requiring your employer to withhold part of your wages and send the money to a creditor to whom you owe money. As every bankruptcy attorney in Indiana well knows, garnishment can come out of salary, commissions, hourly, weekly, or daily wages, and even out of bonuses and income from a pension or retirement plan.
“How much of my wages can they take?” is the one question we hear most often in the five Zuckerberg bankruptcy law offices. The answer? Whichever of these two things is more can be subject to garnishment:
1. 25% of disposable income
2. Whatever amount of disposable earnings exceeds 30x the federal minimum hourly wage.
As part of offering Indiana bankruptcy information, I always add three extras to that answer:
For child support, a much higher percentage of income can be garnished.
More than one creditor can garnish your wages, but once the limit is reached (the 25% or the 30x hourly minimum wage), no money will be there to be garnished!
- A creditor cannot go directly to your employer and order a garnishment. A judgment must be entered through the court.
One of my colleagues, a Richmond bankruptcy lawyer, has a lot of experience with bank garnishment. What that means is that the creditor sends a court order to your bank requesting funds. In Indiana, the law allows banks to “freeze” an account for 90 days to review those court documents.
Since my reason for publishing these Bankruptcy in Indiana articles is to make things easier for Indiana debtors and save them time, money, and anguish, I think the part about bank account garnishment brings out how very important it is to get legal advice at the very earliest signs of financial trouble. (Imagine having your bank account frozen for 90 days!!)
Whether or not filing individual bankruptcy in Indiana turns out to be the best course of action in your situation, getting experienced legal advice always turns out to be the best way to begin confronting financial troubles!
Categorised in: Bankruptcy Indiana
This post was written by Mark Zuckerberg