If you find yourself falling behind on payments, creditors can come after your paychecks. However, if you are like most people, you may not fully understand the intricacies of wage garnishment. What exactly is wage garnishment? How does wage garnishment work? Who can garnish wages? How much can they take out of my paycheck? How long does wage garnishment last? And it should come as no surprise that one of the questions we hear most often is “How do I stop wage garnishment in Maryland?”
How to Stop Wage Garnishment in Maryland
The good news is that there are ways to stop or, at least, reduce wage garnishment. But before we get into that, let’s first look at what wage garnishment is and how it works.
What is a Wage Garnishment?
A garnishment, sometimes called a wage attachment, is a court order that allows a creditor to take money directly from your paycheck – and it is one of the most utilized weapons in a creditor’s collection arsenal. Garnishment continues until the debt in question is fully paid. It is important to note that a creditor cannot garnish your wages without first receiving a money judgment from a court, unless the debt is from the IRS or certain other kinds of government debts.
Maryland Wage Garnishment Calculator
Find out how much will be taken from your paycheck because of a wage garnishment
Who Can Garnish Wages and How Does It Work?
For a creditor to obtain a wage garnishment in Maryland, it must first file a lawsuit and obtain a judgment. Here in Maryland, this is often easy, because the creditor can request what is known as an “affidavit judgment” under Md. Rule 3-306. This allows the creditor to file particular documentation with the court and…
- If the party being sued does not respond, the court can enter a judgment very quickly.
- If the party being sued does respond, there is often still not much of a defense that can be made.
In both scenarios, the creditor will fairly easily obtain a judgment, which lasts for 12 years, can be renewed for another 12 years, and accrues interest at 10% per annum. This means that a $5,000 judgment will accrue interest at $500 per year. 10 days following the judgment, the creditor becomes a judgment creditor and can begin the wage garnishment process. Under Md. Rule 3-646, the judgment creditor must file a Request for Writ of Garnishment in the case, which is served upon the judgment debtor. Upon filing, the clerk of the court issues a writ of garnishment directed at the judgment debtor’s employer to be served by the judgment creditor. The employer must file an answer within 30 days and, if the judgment debtor works for the employer, the employer must list the judgment debtor’s rate of pay and the existence of any prior liens. Now, wage garnishment can begin, typically 25 percent of the judgment debtor’s disposable wages (what’s left after mandatory deductions). Use this Maryland Wage Garnishment Calculator to find out how much will be taken from your paycheck because of a wage garnishment.
In the event that the judgment debtor has more than one garnishment, they are satisfied with the order that they were served and each garnishment must be satisfied before the subsequent garnishments can take effect, under Md. Code C.L. § 15-603.
Can the IRS Garnish My Wages?
Not only can the Internal Revenue Service (IRS) garnish your wages (called a “levy”), but they also do not have to file a suit in order to do so. Some creditors, like those you owe taxes, federal student loans, child support, or alimony, have a statutory right to take money directly out of your paycheck. The weekly exempt amount the IRS can garnish is based on the total of the taxpayer’s standard deduction and the aggregate amount of the deductions for personal exemptions allowed the taxpayer in the taxable year in which such levy occurs. This number is then divided by 52, the total number of weeks in a calendar year.
What Are My Rights?
The best time to stop wage garnishment in Maryland is before it has begun. When the process is already underway, your options are even more limited. However, in either scenario, it is important to contact an experienced Maryland bankruptcy attorney to discuss your rights and options. But generally, you have two courses of action.
1) Filing for an Exemption Can Help
Under Maryland law, you can file an injunction for exemption relief under certain circumstances to protect or “exempt” some or all of your wages. If the injunction is successful, the judge can either reduce the garnishment amount or cancel (set aside) the garnishment order. However, this course of action is rarely successful.
2) Bankruptcy Can Stop Wage Garnishment in Maryland
Bankruptcy is a complicated process, so it’s natural to have questions. One we hear often is, “Will bankruptcy stop wage garnishment?” And the answer is Y-E-S. Bankruptcy is a powerful tool to help individuals and families get their finances under control when debt has become unmanageable. Filing for bankruptcy can stop a foreclosure or auto repossession, aggressive tax collectors and collection calls/letters, wage garnishment, and more.
- When a person files for Chapter 7 bankruptcy, the automatic stay goes into place, which stops all collection activity, including calls, letters, garnishments, foreclosures, and any other collection activity. The automatic stay gives you the protection you need to reorganize your debts. Next, your Chapter 7 trustee will review your bankruptcy petition and schedules and determine if there are any assets worth pursuing to distribute to creditors. In most cases, all of your assets can be exempted under Maryland law to allow you to keep your possessions, cars, and home. Then, if everything goes smoothly in your case, after you’ve completed mandatory meetings, received a no asset report or the assets have been distributed properly, the date to object to discharge has passed and you have taken your required financial management course, the case is ready for a judge to review to sign a discharge order. The discharge is the court order that eliminates your debts and also prevents creditors from taking any action against you in the future.
- When a person files for Chapter 13 bankruptcy, once again the automatic stay takes effect, which prohibits ALL collection activities against the individual, including wage garnishment. This can be a lifeline for many people and gives the bankruptcy filer, or “debtor,” some breathing room to devise a Chapter 13 payment plan that typically spans the course of 3 to 5 years. This Chapter 13 plan allows the debtor to reorganize their debts, catch up on missed payments such as mortgage arrears, car arrears and tax debt, and pay down some of their obligations, along with ensuring they can afford their regular monthly bills. Additionally, under certain conditions within a bankruptcy, it may be possible to recover part or all of the wages that have been garnished.
3) Recovering Garnishments
You may actually recover some of your garnished wages pursuant to section 547 of the Bankruptcy Code. This allows you to recover payments made within 90 days of your bankruptcy filing when such payments provide the creditor with an advantage (preference) over other creditors in the bankruptcy case. To determine if this is an option for you, consult your bankruptcy attorney.
Contact an Experienced Bankruptcy Attorney to Stop Wage Garnishment in Maryland
If you need help to stop wage garnishment in Maryland, Steiner Law Group is here for you. We are a boutique law firm in Maryland that assists individuals and businesses with bankruptcy and financial restructuring services. We have helped hundreds of individuals, families, and businesses discharge millions in debt, and have experience stopping wage garnishments and getting back certain garnishments that were taken. For example, we recently recovered for a client more than $3,600 that was taken by a judgment creditor.If you have more questions about wage garnishment or Chapter 7 or Chapter 13 bankruptcy, please schedule a risk-free consultation or contact Steiner Law Group, LLC at (410) 670-7060 to learn more about bankruptcy options.