A wage garnishment (also known as a “wage attachment or “wage execution”) is an official order from the court, or government agency, sent to your employer. This order requires your employer to set aside part of your wages from your paycheck and send it directly to your creditors.
Some states, including New Jersey, provide employees greater protection with respect to wage garnishment. This unique protection changes the “25-30 Rule” from Federal law to a “10-25 Rule.”
This “10-25 Rule” states that a creditor can not take more than 10% (rather than 25%) of an employee’s income if that employee earns under 250% of the federal poverty level. Also, this New Jersey law allows for creditors to take up to 25% of “disposable earnings” from an employee, but only if that employee earns more than 250% of the federal poverty level.
You can find the federal poverty levels at the Department of Health and Human Services website.
In most cases, a court judgment is required for a wage garnishment stating that a creditor is owed money. If you owe money to credit card companies, utility companies, medical providers, etc. they must first obtain a judgment in court to be able to legally garnish your wages.
Some exceptions to this rule apply. In New Jersey, your wages from your paycheck can be garnished without a court judgment for the following reasons:
In a Chapter 7 or Chapter 13 bankruptcy, a trustee can theoretically take as much as 90% of your “disposable earnings.” The Internal Revenue Service (IRS) can take as much as 70% of your wages in certain cases. Filing for bankruptcy may stop all wage garnishments immediately. Contacting a bankruptcy lawyer can help you understand your rights if you are filing for a Chapter 7 or Chapter 13 bankruptcy and facing possible wage garnishment.
A wage garnishment puts an extra administrative burden on your employer, as percentages from your salary must be calculated, separated, and then sent to your creditor from your paycheck each payroll period. Threatening to terminate you because of a wage garnishment is illegal. If your employer has made a threat to terminate your employment because of this additional administrative burden caused due to your wage garnishment, you should contact Silverberg Law Firm immediately.
If you are facing possible wage garnishment in the state of New Jersey, contact an expert in bankruptcies and wage garnishments at the Silverberg Law Firm. Our legal team can fight for your rights and potentially even stop your wage garnishment. Our experienced attorneys can help you create the best plan for your bankruptcy or wage garnishment, and minimize the debt you owe. We will help you navigate your financial options.