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Posted: Mon Jul 14, 2008 8:44 am Subject: wage garnishment question

My sister is going to file bankruptcy as soon as she gets her paperwork together this week...I have a question she currently has a wage garnishment coming out of her check...what does the following mean:

Federal non-bankruptcy law limits how much of your pay can be taken for collection purposes. Most state laws also cover this and may offer more protection. Most states have special limits for collection of spousal or child support.

Minimum 85% of earned but unpaid weekly disposable earnings or pension payments for head of family; minimum 75% of earned but unpaid weekly disposable earnings, or 30 times the federal hourly minimum wage, whichever is greater, for all others; bankruptcy judge may authorize more for low-income debtors

Neb. Rev. Stat. § 25-1558

Does this mean that she cannot include this medical debt in her bankruptcy or will filing bankruptcy stop the garnishment? I am confused...please help

Posted: Mon Jul 14, 2008 9:00 am Subject:

BK will stop all claims, judgements, lawsuits, etc.

What you quoted above appears to be the FEDERAL guidelines to wage garnishment amounts (max amount). States could have lower garnishment amounts.

For instance, Federal law allows up to 25% of your gross wages to be garnished. Illinois allows only 15% of gross wages. If you are head of household, the garnished amount may be less than the 25%/15% allowed.

With respect to the "30 times federal hourly minimum wage," that is a clause that determines a benchmark in determining when a person can be garnished. If you make minimum wage, then they can't garnish. If you make more than minimum, then you can.

To answer your question, she CAN include her medical bills in her BK and yes, BK will stop the garnishment. (Many people file BK because of medical bills.)

Posted: Mon Jul 14, 2008 9:22 am Subject:

Will she get all the money back that they have taken so far? If so, how long will it take, probably after the case is discharged, correct? Who notifies the attorney's office that is garnishing her wages?

Also what does this mean, specifically #3?

Nebraska Wage Garnishment
Although Nebraska allows wage garnishment it rejects the Federal exemptions.

1. Proceeds or interest from payments or settlements under the Worker's Compensation Act (Neb. Rev. Stat. §48-149), except for attorney's fees approved in writing by district court (Neb. Rev. Stat. §48-108);

2. Fraternal insurance benefits (Neb. Rev. Stat. §44-l072);

3. Certain wages; all proceeds, cash values and benefits accruing under any annuity contract, policy or certificate or life insurance payable upon death of insured to beneficiary other than estate of insured, or under any accident or health insurance policy, to the extent of $10,000,00 (Neb. Rev. Stat. §44-371

Sorry to be such a pain in the rump just need to know these answers asap thanks a bunch.

Posted: Mon Jul 14, 2008 9:27 am Subject:

These are questions for her attorney. IMO, I doubt she will get any money back that she has paid already through her garnishment. That is considered $ paid on her account and should reduce her debt amount with that account.

I don't know if filing BK will immediately stop the garnishment. She should tell her attorney immediately about the garnishment so he can take quick action if necessary.

She needs to discuss these things with her attorney ASAP so they can plan a course of action.