December 2, 2021 | Bankruptcy

Recently, we’ve fielded a LOT of phone calls about garnishments. A good number of these phone calls were from frustrated people who stated they were not aware that a garnishment was on its way before it was too late. As pandemic relief winds down and creditor lawsuits tick up, now might be a good time for a crash course on garnishments and what to do if you are facing one.

 What is Garnishment?

Garnishment is a court order directing that money or property be seized from the defendant to satisfy a debt owed to a creditor.

 How does garnishment impact me?

Wages paid by an employer may be garnished. In the state of Nebraska your income may be garnished up to 25% if you are NOT the head of a household (no dependents and/or not the highest wage-earner). This means you could lose $250 of every $1000 you make.

Even if you are the head of your household you may still be garnished up to 15%. This means you could lose $150 of every $1000 you make.

Wage garnishment is the most common result from a judgment entered against you. However, your bank account may also be garnished. If a creditor obtains a garnishment order on a bank account your bank (or credit union) will be required by law to “freeze” the account and remove any money on deposit to send to the creditor. If the creditor is lucky and gets the garnishment in place on pay-day, you could potentially have your entire paycheck seized.

 What do I do if I am being garnished?

If you are currently being garnished by a creditor (other than a governmental agency, i.e. child support) this means you have already been sued, judgment was entered against you, and now you only have a few options to stop the garnishment.

You can pay off the debt, in full, with your own money. Call the attorney who sued you and request the exact payoff.

You can pay off the debt with somebody else’s money – perhaps a sympathetic family member has the money available and wants to help. Call the attorney who sued you and request the exact payoff.

You can try to work out an alternative payment arrangement with the creditor. This will still require you call the attorney who sued you to see if they are open to alternative payment arrangements. This is difficult to achieve, however, as you have lost all of your leverage if you engage after the garnishment has begun.

Or you can file a bankruptcy case.

If you file a bankruptcy case we will file the appropriate documents in county court to stop the garnishment. Turnaround time is typically a few days. It is important to keep in mind that any funds garnished from you after your bankruptcy case has been filed will be returned to you. It may also be possible to recover some of the funds that were garnished from you prior to your bankruptcy filing. The results vary from case to case depending on a number of circumstances.

If you are being garnished or are worried about garnishment, contact High & Younes to discuss your options.   402-933-3345

Garnishment Nebraska – Garnishment Basics