Stopping Wage Garnishment in New York? Learn how to stop wage garnishment in New York

Facing wage garnishment is stressful. You’re worried about bills, how to support yourself, and wondering, “How to stop wage garnishment in New York?”. The good news is that there are ways to fight back, and in some cases, stop a wage garnishment entirely. In this article, we’ll explain what wage garnishment is, your rights under New York State law, and provide options on how to stop wage garnishment in New York.

What is Wage Garnishment?

In New York, a wage garnishment (also known as an income execution) happens when a creditor has the legal right to take a portion of your earnings directly from your paycheck. This typically occurs after a court judgment is issued against you for unpaid taxes or a debt collection lawsuit and remains unpaid.

Who Can Garnish Wages in New York?

Various creditors in New York can seek wage garnishment if you haven’t paid your debts. A judgment creditor can garnish your wages after winning a court case against you. Common types of debts that may lead to wage garnishment in New York are:

• Credit card debts.
• Personal loans.
• Medical Bills. Note that under New York State law, your wages cannot be garnished by a healthcare provider for medical debt. But watch out. This doesn’t mean hospitals won’t pursue other collection methods. They are still within their rights to file lawsuits, pursue debt collection activities, or even attempt to seize your assets.)
• Court-ordered child support.
• Defaulted student loans, including defaulted federal student loans.

Remember that specific regulations apply in each of these cases. The amount creditors can take from your paycheck varies depending on factors like your income and the type of debt. Understanding these regulations is crucial when you’re looking for how to stop wage garnishment in New York. New York wage garnishment laws provide different protections and limits for different situations.

Understanding Wage Garnishment Limits in New York

New York law places limits on the amount a creditor can garnish from your wages. The limitations ensure that you can afford basic living expenses while still making payments toward your debt.

The law protects different income levels and establishes a cap on the percentage of earnings a creditor can garnish. This is referred to as the maximum garnishment amount. What the maximum garnishment amount is will be outlined in the court order you received.

Wage Garnishment Limits on Disposable Earnings

New York wage garnishment law differentiates between two primary types of income execution: those issued by a court and those stemming from certain government debts. For income executions issued by a court (the majority of cases), creditors can generally garnish the lesser of:

• 10% of your gross income; or
• 25% of your disposable earnings.

So what are “disposable earnings?” Disposable earnings represent the funds remaining from your paycheck after deductions mandated by law such as taxes, Social Security, and unemployment insurance are taken out. Voluntary deductions like health insurance or retirement plan contributions don’t factor in. It’s critical to note that this “lesser of” rule means whichever calculation results in the smaller amount will be the one used to determine your wage garnishment.

Additional Considerations

In cases involving multiple wage garnishment orders, federal law caps the total garnishment amount at 25% of your disposable earnings, or the amount by which your disposable income exceeds 30 times the federal minimum wage (currently $7.25/hr) – whichever is less. This federal limitation primarily comes into play when there’s a child support order alongside another type of debt.

For those in this difficult situation, it’s important to contact the New York State Department of Labor to determine the garnishment rules that apply to your situation and the applicable minimum wage. A debt collector will only be able to garnish wages if they comply with these rules. For example, creditors garnish wages at different rates for child support payments compared to credit card debts.

Exempt Income

New York law protects certain types of income from garnishment. Creditors can’t touch funds derived from sources such as:

• Social Security benefits.
• Supplemental Security Income (SSI).
• Retirement and pension benefits.
• Veteran’s benefits.
• Public assistance.
• Unemployment benefits.
• Disability benefits.
• Worker’s compensation benefits.

However, be aware that exemptions aren’t automatic. If a creditor attempts to garnish these types of funds, you’ll likely need legal help to stop them. For a comprehensive view of what is exempt under NY law, check out this full list of exempt income sources.

How to Stop Wage Garnishment in New York

Getting hit with wage garnishment can disrupt your financial life, especially when you’re struggling to meet essential expenses. But all is not lost. You have rights under the Consolidated Laws of New York that protect you as a consumer from unreasonable debt collection tactics. And thankfully, there are proactive steps you can take. You have options and don’t need to simply resign yourself to this situation. You’re likely wondering how to stop wage garnishment in New York.

Negotiate With Your Creditor

Before you explore drastic options, try reaching out to your creditor. Try explaining your financial hardships, and be prepared with a payment plan. Often, creditors would rather strike an agreement with you for smaller payments than incur the added time, cost, and effort of pursuing garnishment.

For example, if you are struggling with credit card debts, reach out to the credit card company. If you have defaulted student loans, try calling your student loan servicer and asking about repayment plan options.

Negotiate a Payment Plan

Negotiating a payment plan with your creditor directly is usually the easiest way to resolve a wage garnishment. While this method doesn’t always guarantee stopping a wage garnishment completely, it demonstrates your commitment to making payments, helping to stop the garnishment process. For some debts, like back taxes, you may even be able to get on a payment plan with an offer in compromise.

File for Bankruptcy Protection

One powerful legal recourse at your disposal to potentially stop wage garnishments and regain control over your financial life is bankruptcy. In many situations, a bankruptcy filing triggers what is known as an “automatic stay.” An automatic stay legally halts all collection activities against you, including those dreaded wage garnishments. While an active bankruptcy case proceeds, your creditors typically must cease their pursuit of your earnings.

It is important to remember that filing for bankruptcy protection is a significant financial decision with lasting consequences. To determine if this path is the optimal solution, consulting with a bankruptcy attorney is recommended. They can provide personalized guidance tailored to your unique situation. If this feels overwhelming, The Law Office of William Waldner offers legal help for people filing bankruptcy and facing wage garnishments in New York.

Wage garnishments don’t happen out of the blue. They’re often the result of unpaid debts, and ignoring them will only worsen your financial troubles. By taking prompt action, understanding your rights, and exploring available solutions like those outlined in this article, you can address wage garnishment head-on and strive towards a more stable financial future. Remember that seeking legal advice from an experienced professional is crucial throughout this process, as they can provide guidance specific to your situation.