If you fall behind on your credit card bills and other unsecured debts, one of the options your creditors have is to seek garnishment of your wages. You may already know that wage garnishment is a court order that directs your employer to withhold a portion of your wages for the benefit of your creditors, but may not understand the rules surrounding it or the ways of avoiding this unpleasant process completely. The following will provide a brief summary of the main rules of garnishment in Illinois.
Overview of Illinois garnishment rules
In Illinois, in the majority of cases, your wages cannot be garnished without prior notice. Most of the time, your creditors must first take you to court and win a lawsuit against you before garnishment is even an option. Only after this process has been completed may your creditor ask the court to allow garnishment as a means of collecting the judgment against you.
Although this is usually the case, there are instances where creditors do not have to sue you first in order to garnish your wages. In general, this is true if you are overdue on taxes, student loans or child support.
In Illinois, creditors are not allowed to garnish your entire paycheck. The law sets limits on what may be deducted from it. In general, the law limits the amount that may be garnished to the lesser of:
• 15 percent of your gross wages; or
• The amount of disposable income remaining after deducting the Illinois minimum wage (or federal if it is higher) multiplied by 45
Additionally, certain types of income cannot be garnished at all under the law. This includes:
• Unemployment compensation
• Veterans\ benefits
• Social Security or SSI
• Alimony and support
• Public Aid
• Workers compensation
If you have multiple creditors garnishing your wages, the law also limits that total amount may be deducted from your wages to 15 percent, regardless of the number of creditors.
Dealing with garnishment
Since a court order is required before garnishment may begin in most cases, you will have plenty of notice and opportunity to avoid the process completely. One way of doing this is to negotiate a payment plan with your creditor in lieu of having them garnish your wages. However, this tactic does not always work. Although you may offer very reasonable terms, your creditor is under no legal obligation to work with you and may opt to garnish your wages instead.
In such cases, the best remedy is likely to file bankruptcy, if you cannot afford the debt you owe. Once you file bankruptcy, Any pending lawsuit, garnishment or debt collection activity must stop, because of the automatic stay. Once you compete the bankruptcy process, most of your delinquent debts that were the subject of the garnishment attempt are discharged, giving you a clean slate financially.
Depending on your situation, bankruptcy may or may not be the best move for you. An experienced bankruptcy attorney can consider the reality of your situation and recommend the best route back to financial health.