Wage Garnishment and Bankruptcy

Are your wages currently being garnished in Illinois, or do you have concerns that your wages will soon be garnished? You should speak with an Oak Park bankruptcy lawyer to learn more about how filing for Chapter 7 bankruptcy can stop or prevent wage garnishment. Under Illinois law (735 ILCS 5/), wage garnishment can occur in many different situations. To better understand how consumer bankruptcy may be able to provide you with relief, it is important to learn more about what we mean by wage garnishment, when and how it can be used, and how filing for personal bankruptcy can help.
Learning More About Wage Garnishment
What is wage garnishment, and what does it have to do with personal bankruptcy? Wage garnishment can happen in any state, and it is a deduction that your employer automatically takes from your paycheck as a result of a court order. For example, if you owe a significant amount of money to a creditor and the creditor sues you in order to recover what you owe, your wages could be garnished in order to repay the creditor if that creditor wins its claim in court. Owing back child support in Illinois can also result in wage garnishment.
To be clear, wage garnishment cannot occur in most situations unless a court permits it. When wages are garnished, you an have a certain amount or percentage of your wages taken out of your paycheck before you ever receive it. Garnishment can also result in property of the debtor being taken in order to repay a creditor following a civil claim and a court order in favor of the creditor.
Garnishment Exemptions Under Illinois Law
There are certain types of property under Illinois law that are exempt from garnishment. According to the statute, exemptions include but are not limited to the following:
  • Debtor’s equity interest in personal property (up to $4,000 in value);
  • Debtor equity interest in one motor vehicle (up to $2,400 in value);
  • Debtor’s equity interest in his or her professional books or tools of the trade (up to $1,500);
  • Social Security benefits;
  • SSI benefits;
  • Public assistance benefits;
  • Unemployment compensation benefits;
  • Veterans’ benefits; and
  • Certain property tax relief benefits.
In other words, a court order cannot result in the property above being taken through a garnishment notice.
How can Filing for Personal Bankruptcy Help?
Whether you already are dealing with wage garnishment or are anticipating that a court order will be issued and will lead to garnishment, filing for Chapter 7 bankruptcy may be able to help. As we noted above, not all debts that result in wage garnishment can be eradicated through Chapter 7 bankruptcy. For instance, if you owe child support and your wages are garnished, you cannot rely on consumer bankruptcy to avoid paying child support. However, when it comes to consumer debts for which your wages are being garnished, filing for Chapter 7 bankruptcy results in an automatic stay.
The automatic stay means that creditors cannot continue collecting. Then, once your debts are discharged, you may not owe the creditor any longer and you will not need to worry about the garnishment.
Bankruptcy Attorney in Oak Park Can Help
An experienced Oak Park bankruptcy attorney can say more if you have questions about garnishment and the benefits of bankruptcy. Contact the Emerson Law Firm for more information.
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