If you have fallen behind on bills, one of the most stressful things that can happen is a wage garnishment. Suddenly, a portion of your paycheck is taken before you ever receive it, making it even harder to pay your mortgage, rent, utilities, and other necessities.
Many people in Wisconsin are surprised by how much creditors can actually take from their wages, and it can feel like a significant portion of their paycheck is being lost.
What Is Wage Garnishment?
Wage garnishment occurs when a creditor obtains a court judgment and then requires your employer to send part of your paycheck directly to the creditor to pay the debt.
This most commonly happens after a lawsuit over:
- Credit card debt
- Medical bills
- Personal loans
- Old judgments
Once a garnishment begins, it continues until the debt is paid, the garnishment expires, or the court orders it to stop.
Wisconsin Wage Garnishment Limits
Wisconsin law limits the amount creditors can take from your paycheck.
For most consumer debts, the maximum garnishment is generally 20% of disposable earnings.
Disposable earnings mean your wages after taxes and certain required deductions.
Example
If your take-home pay after taxes is $800 per week, the maximum garnishment would usually be about $160 per week.
That means the creditor could receive $160, and you would receive $640.
Garnishments Last Up to 13 Weeks
Unlike some states, Wisconsin wage garnishments typically run for 13 weeks at a time.
If the balance is not paid off during that period, the creditor can file again and start another garnishment.
Because of this, some people find themselves dealing with garnishments for many months or even longer.
Different Rules for Certain Debts
Some types of debts follow different rules.
Child Support
Child support garnishments can take a much larger portion of wages, depending on the situation.
Federal Taxes and Student Loans
Government debts sometimes follow federal collection rules and can garnish more than standard consumer debts.
Can Wage Garnishment Be Stopped?
There are several ways you can stop a wage garnishment.
These can include:
- Working out a settlement or payment arrangement with the creditor
- Filing a garnishment answer if circumstances allow
- Filing a Wisconsin Chapter 128 repayment plan
- Filing bankruptcy
Bankruptcy and Garnishments
When a bankruptcy case is filed, a federal protection called the automatic stay goes into effect. This stops collection activity, including wage garnishments, as soon as the case is filed. A Chapter 128 repayment plan can also stop wage garnishments by requiring creditors to receive payment through the court-ordered plan instead of continuing the garnishment.
When to Speak With a Bankruptcy Attorney
If your wages are being garnished, it is important to understand your options as soon as possible. The sooner action is taken, the sooner the garnishment may be stopped.
Many people are surprised to learn that they may qualify for bankruptcy or other debt relief options that can eliminate or restructure their debts.
If you are dealing with wage garnishment or overwhelming debt in Wisconsin, speaking with an experienced bankruptcy attorney can help you determine the best path forward.
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