It’s payday, money’s looking tight and you are looking forward to getting your paycheck. If one of your creditors has gotten a judgment against you for money you owe, and has used that judgment to garnish your wages, you could be in for a shock. Garnishment in Hawaii obligates your employer to withhold a percentage of your pay and send it to your creditor. This continues each pay period, until the debt is paid. If this is happening to you, you should get advice from a Hawaii bankruptcy attorney about how to deal with this.
Although the law limits the percentage a creditor can garnish of your wages, that doesn’t help if you are just managing to balance your bills with your income. Even a small loss of income can make a difference and create a snowball effect that results in your getting deeper into financial trouble. You could fall behind on your mortgage or car payment, risking foreclosure or repossession. Filing for bankruptcy in Hawaii can stop garnishment.
A wage garnishment is a legal procedure where a portion of a person’s earnings are required to be withheld by an employer for the payment of a debt. In general, a creditor in Hawaii may garnish up to 25% of the disposable earnings. With so many households living paycheck to paycheck, just barely keeping their heads above water. When a creditor begins taking money directly out of that paycheck, it becomes difficult to keep everything afloat.
When you file for bankruptcy in Hawaii an automatic stay goes into effect the minute your plan is filed. From that moment on, during the pendency of your case, creditors are prevented from attempting to collect money from you. They can’t call you, they can’t file lawsuits against you, they can’t use a judgment awarded in court to garnish your wages, and they can’t continue to garnish your wages if they have already started.
Certain types of income are protected from garnishment by creditors. These include Social Security, IRA’s and 401(k)’s. Additionally, garnishments for certain type of debts are issued automatically. For example, all child support orders include an automatic wage withholding order. If you owe back taxes the IRS or State can garnish your wages without court permission.
If you are facing a garnishment you should seek an experienced attorney. Filing for bankruptcy stops creditors from obtaining judgments, and can void a judgment if one is already in place. For those debts that are not dischargeable in bankruptcy – child support arrears, back taxes – filing can also help by proposing a repayment plan that will spread out the payments in a more manageable way.