A wage garnishment is a legal request from a creditor to take money directly from your paycheck before you get paid. If you owe taxes or fall behind on your federal student loans, the government can make such a request without a court order. All other creditors must obtain a judgment in a court of law before they can legally order your wages taken to repay a debt.

The good news is that you’ll usually get a notice first and depending upon when your employer calls in to order payroll, (known as the “payroll cutoff date”), you will have a limited amount of time to take action that might stop your wages from being taken. The amount of your wages that can be taken also depends on who is garnishing. The IRS can take up to 50% of your wages to pay back taxes, so a wage garnishment is going to hurt you financially if you don’t take action to stop it. The amount that creditors can take ranges from 15% up to 50%.

The easiest way to stop a wage garnishment from happening is to make a payment arrangement with the creditor immediately and start making payments. Unfortunately, this priceless information is only helpful when you have money to pay them. If you don’t have the money to pay them, then the next best alternative to stopping the wage garnishment is to file for bankruptcy protection.

You see, the filing of a bankruptcy case raises what is called the Automatic Stay, which is a court order to stop all collections against the person filing for bankruptcy protection, including foreclosures and wage garnishments. This makes for a powerful tool against those aggressive debt collectors who have taken the trouble of suing you, obtaining a judgment and exercising their legal debt collection efforts by finding your employer and requesting to be paid from your paycheck.

Depending upon your income and financial status, you could file under Chapter 7 of the Bankruptcy Code for a liquidation bankruptcy where you stop the garnishment without making a single payment on the debt. Otherwise, if you income is above average for your household size (using IRS median household income standards), or, if you have assets to protect like home equity, then you can propose a repayment plan under Chapter 13 of the Code.

Whichever direction you choose to take, you need to act fast or the garnishment will go forward. It’s important to consult with an attorney to explore all of your options for getting out of debt and it’s worth exploring a bankruptcy case because it’s a powerful tool that puts you back in control of your paycheck and gives you breathing room to get back on your feet financially. Dump the debt and move on quickly toward your financial goals. Most attorneys provide free consultations, so take advantage of their advice even if you don’t hire them. We’ve helped hundreds of families avoid wage garnishments. Let us know if we can help you too.