How to Avoid Garnishment in New York

When you’re in debt, garnishment is one of the worst outcomes and one of the biggest fears you can face. After all, it’s hard to meet your basic daily needs when a powerful company reaches your paycheck or bank account directly.

Fortunately, garnishments don’t just happen. First, a creditor has to sue you and win a judgment against you in court. After the judgment, an enforcement officer sends you a letter stating you have 20 days to make the payment or face garnishment. 

In New York, creditors can take the lesser of 10% of your gross wages or 25% of your disposable income. You’re exempt from garnishment if your income is less than 30 times the state minimum wage. Certain income sources, such as social security, are also exempt. The IRS runs on different rules, leaving you only enough money to pay for “basic living necessities.” The monthly allowance for a single individual with no dependents wouldn’t even cover the cost of rent anywhere in the state. 

Garnishment increases the amount of debt owed. You’ll owe the debt, a poundage fee of 5%, and filing fees. 

There are exceptions—if you owe income tax, government student loans, or court-ordered child support, these creditors can garnish your check without seeking a judgment. 

Pay the Debt in One Lump Sum

You can always stop a garnishment by either paying the debt in full or paying a lump sum that settles the debt for less than it’s worth. You’d have to negotiate the settlement with your creditor to do the latter.

Of course, if you had the money to pay off the debt in one lump sum, you likely would not be facing garnishment in the first place. 

File an Emergency Motion

You might be able to ask the court to vacate or remove the judgment, but you’ll have to show cause as to why you didn’t answer the initial debt collection lawsuit. 

You would also need to make a case as to why the creditor shouldn’t win the lawsuit. Usually, the only valid defense is that you didn’t actually owe the debt in the first place. 

File for Bankruptcy

Once you’re on the path toward wage garnishment, bankruptcy is usually the quickest, easiest way to put a stop to the process. The automatic stay prevents court cases from going forward. It also stops garnishment. 

There are exceptions. Child support is non-dischargeable debt, so bankruptcy can’t stop child support garnishments. The automatic stay can pause a federal bankruptcy garnishment, but few debtors can actually discharge bankruptcy debt. 

As for IRS debt, it’s impossible to discharge through bankruptcy once the IRS has filed a tax lien on your assets. Nevertheless, the automatic stay will stop garnishments during the bankruptcy process, and bankruptcy may buy you enough time to resolve the debt. 

Do not attempt to file bankruptcy without a lawyer, especially if you have a garnishment. If your case is dismissed for any reason, the garnishment will come right back. In addition, the automatic stay is only valid for 30 days if you refile after a dismissed bankruptcy case. 

Need help? Contact our office to get started today.

See also:

Can I Recover Garnished Wages in a New York Bankruptcy? 

How Does Wage Garnishment Work in New York? 

When Does It Become Absolutely Critical to File for Bankruptcy? 



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