Bankruptcy Will Stop Paycheck Garnishment In Colorado
Fridays are busy days around the office, with lots of phone calls. That’s usually payday and when people find out that their paycheck has been garnished. Suddenly, there is a big chunk missing from their check and they are anxious to find out if there is a way to get their creditor from getting that money.
If your check or bank account has been garnished, here are some things you should know:
- Before a creditor can garnish your paycheck, they have to file a lawsuit. In Colorado, a creditor has to serve you a lawsuit in person. However, it can leave the lawsuit with an adult who lives with you and can leave it at work with the appropriate person. If you don’t respond to the lawsuit, the creditor will get judgment and can garnish your paycheck or bank account. The creditor does not have to give you advance notice that it is going to garnish your check. Keep in mind that lenders of federally guaranteed student loans can generally garnish your paycheck (and tax refunds) without filing a lawsuit.
- In Colorado, a creditor can garnish 25% of your take home pay. If multiple creditors have gotten judgments, only one creditor can garnish your paycheck at a time. The others will have to wait their turn. If a creditor wants to garnish your paycheck, it will have to ask the court for a writ of garnishment, which the creditor then has to serve on your employer. Hopefully, your payroll department will let you know they received the writ, but oftentimes the first time you’ll find out is when you get a smaller check.
- Some income, such as unemployment or Social Security benefits can’t be garnished. If you’re temporarily unemployed, the creditor will have to wait until you get a new job. Don’t feel compelled to let them know where you work once you get a job, though.
- You might be able to avoid garnishment if you can get them to agree to monthly payments that fit your budget. The best time to negotiate these payments are before they garnish your paycheck. Once they start garnishment, they aren’t likely to stop until they get all the money you owe.
- Creditors can also garnish your bank account. Once they serve your bank the garnishment order, the bank will freeze the money in your account. You can file an objection to the garnishment (for example if the funds are from unemployment benefits and are exempt).
The last thing you should know is that bankruptcy will stop garnishment. Bankruptcy will also stop phone calls and any lawsuits that have been filed. Bankruptcy might be a good option if there are multiple creditors that have judgments, but if there is just one creditor with a small judgment, there are probably better options than bankruptcy.
Talk To A Bankruptcy Attorney About How To Stop Your Paycheck From Being Garnished
If you are being overwhelmed by debt collectors, we hope you’ll come in for a free consultation with an experienced bankruptcy attorney to learn if it might be an option for you. You can schedule your appointment online or call 303.331.3403 to set up a time that is convenient for you.