If you get behind on your bills there are a number of methods that your creditors have at their disposal to attempt to collect the debt from you. Most creditors will start off by sending you past due notices and calling you in an attempt to collect the debt. In fact, many creditors will call every day. If you cannot make the monthly payments according to your current payment agreement there are a number of options to help you pay off your debt or reduce the monthly payments. For example, you could enter into a debt settlement agreement with each of your creditors, you could pay off your debt through debt consolidation, or you could file for chapter 7 or chapter 13 bankruptcy. However, if you fail to take steps to pay off your debt and your creditor concludes that you have no intention to voluntarily pay of your debt, the creditor may file a lawsuit against you in court and secure a judgment against you. After the judgment is secured, in order to collect what is owed a portion of your paycheck may be garnished. This means that your employer is required by law to retain a portion of your paycheck and send that money to your creditor. In New York this process is also referred to as wage or income execution. If your wages are being garnished because a creditor obtained a judgment or default judgment against you, it is important that you contact an experienced New York Garnishment Lawyer who will review the specifics of your financial situation and explain to your options for managing your debt.
Limits on wage garnishmentsWhile a creditor with a judgment against you has the right to garnish your wages, there are limits on the amount of your paycheck that the creditor can seize. A creditor cannot seize your entire paycheck, leaving you with no money to purchase food and pay for other life necessities. According to New York Civil Practice Law and Procedure section 5231, a creditor can only take the lesser of 10% of your gross wages or 25% of your disposable income to the extent that such amount exceeds 30% of minimum wage. Your wages cannot be garnished if your disposable income is less than 30 times minimum wage. "Disposable earnings" are defined as the money that left over in your paycheck after your employer has made deductions required by law such as federal, state and local taxes, and social security.
Stopping a garnishmentIf your wages are being garnished, that means that a creditor has obtained a judgment against you. Typically before a judgment is issued you will be served with a civil complaint that will give you the time and place of the hearing regarding your debt. If you respond to the complaint by filing an answer and attend the hearing, you will have the opportunity to challenge the creditor's attempt to get a judgment against you. If the judge rules against you the judge will enter a judgment against you. If you fail to appear at the hearing the judge will likely issue a default judgment against you and in favor of the creditor. While a judgment is typically a final order, if a default judgment was entered against you have the option of going to court and attempting to get the default judgment against you vacated.
Under New York law there are two primary reasons that a court will vacate a default judgment. Under New York Civil Practice Law and Procedure section 5015, a court will vacate a default judgment if the default was excusable. If you have a good reason for missing the court date and a reasonable defense, the court will vacate the default the judgment. For example, if you never received the summons to appear in court, then that is a good reason for missing the court date. The second reason that a court will vacate a default judgment is if the court lacked personal jurisdiction. If, for example, the creditor did not properly serve you, then you may be able to successfully argue that the court lacked personal jurisdiction over you. Keep in mind that you must file your motion to vacate a default judgment within one year of when the default judgment was entered against you.
Having your wage garnished will have a negative impact on your financial situation and the financial stability of your family. However, there are ways to avoid garnishment and to fight garnishment that an experienced New York Garnishment Lawyer understands. The staff at Stephen Bilkis & Associates, PLLC has extensive experience helping clients avoid garnishments, eliminate debt and deal with other issues related to debt relief. Contact us at 800.696.9529 to schedule a free, no obligation consultation regarding your debt issues.