Legal Question in Credit and Debt Law in Wisconsin

Bankruptcy to Prevent Garnishment of Wages

You need to consult with a bankruptcy lawyer as soon as possible. Without immediate attention, creditors who have judgments can sweep bank accounts and garnish up to 25% of net wages until the debt is paid in full (including court costs and judgment interest). A bankruptcy filing can generally prevent this. These comments are not intended as legal advice for you and do not create an attorney client relationship between us (unless you subsequently retain me).

Re: garnishment

You can try to negotiate a settlement or payment plan before judgment is taken, but as the name suggests, it is voluntary. So if you owe the money and the creditor is NOT willing to agree to a settlement or payment plan, the creditor will be entitled to a judgment.

If the creditor gets judgment in a small claims action (usually a claim in the amount of $5,000 or less)you have to fill out a form disclosing your assets and income. In a large claim case, the creditor can hold a supplemental exam wherein he can compel you to attend and to give the same information.

The most common way to enforce a judgment is by a wage earner garnishment. Under the current Wisconsin State Statutes, the first 80% of the debtor�s disposable earnings are exempt from garnishment. All your earnings may be exempt in some cases, for example, if your income is would become less than the presumed poverty level for your household size and income.

A single garnishment lasts for 13 weeks and can be renewed. If there is more than one garnishment creditor, they take turns so there is only one garnishment at any one time.

If you are subject to garnishment, in the usual case the creditor gets 20% of the net amount your wages after deduction allowed by law are deducted. These deductions are usually limited to income tax withholding and social security deductions.

Knowing how much a creditor can get if you are garnished gives you an idea how much you might be able to get the creditor to settle for in monthly payments. The creditor might take a little less knowing the creditor will also save the time and expense to garnish.