Wage garnishment is one of the most effective weapons in the debt collector’s arsenal. From the debtor’s perspective, garnishment is a devastating setback. As if having a debt problem wasn’t bad enough, now there is money missing from your paycheck. If you are facing wage garnishment in Wisconsin, there is good news and bad news. There is also hope that you can make it stop.
Limits apply
In most cases, the maximum amount of your paycheck a creditor can garnish is 20% of your disposable earnings. Disposable earnings are the amount of your paycheck that is left after legally required deductions such as taxes have already been taken out.
Exceptions to this 20% limit include missed child support payments and back taxes. If you owe these types of debts, the amount of garnishment you face may be as much as 25%.
People living in poverty are protected from garnishment
If your income places you beneath the federal poverty threshold, creditors may not garnish any of your wages. This is also the case if you rely upon means-tested government benefits such as food stamps or supplemental security income.
Payday lenders may not garnish
One type of lender that is not allowed to garnish wages in Wisconsin is payday loan providers. If you owe a payday lender money, that lender may not seek collection through garnishment but may employ other debt collection tactics.
You can make it stop
If none of these exceptions apply, a creditor can garnish your wages, provided they go through the proper process of obtaining a court judgment against you. The good news? You also have legal options at your disposal. By filing for bankruptcy, you can stop wage garnishment and other collection actions. In many situations, bankruptcy can also result in the total discharge of your debts, leaving you free to move on with your life with a clean financial slate.
