If you’re facing wage garnishment in Maryland, it can feel like a financial nightmare. But fear not, as there are ways to stop this process and regain control of your finances. In this article, written by Nicholas J. Del Pizzo, a bankruptcy lawyer in Baltimore, MD, we will explore what wage garnishment is, who can garnish your wages, and most importantly, how you can stop wage garnishment in Maryland.
What is Wage Garnishment?
Wage garnishment, also known as a wage attachment, is a legal process that allows a creditor to collect money directly from your paycheck. It’s a powerful tool in a creditor’s arsenal and is often used to recoup outstanding debts. However, it’s important to note that a creditor cannot garnish your wages without first obtaining a money judgment from a court, except in cases involving the IRS or specific government debts.
Who Can Garnish Wages and How Does it Work?
To initiate wage garnishment in Maryland, a creditor must file a lawsuit and obtain a judgment. Maryland’s legal system makes this process relatively straightforward. Here’s how it typically unfolds:
Filing a Lawsuit
The creditor files a lawsuit to seek repayment for the debt. Affidavit Judgment: Maryland law allows for something called an “affidavit judgment” under Md. Rule 3-306. This process can result in a swift judgment if the party being sued does not respond. Even when the party being sued does respond, there may be limited defenses available.
Judgement and Garnishment
Once a judgment is obtained, it is valid for 12 years and can be renewed for another 12 years. The judgment also accrues interest at a rate of 10% per annum. Ten days following the judgment, the creditor becomes a judgment creditor and can initiate the wage garnishment process.
Request for Writ of Garnishment
Under Md. Rule 3-646, the judgment creditor must file a Request for Writ of Garnishment in the case. This request is served upon the judgment debtor. Once filed, the court clerk issues a writ of garnishment, which is then directed at the judgment debtor’s employer and served by the judgment creditor.
Employer Response
The employer must respond within 30 days. If the judgment debtor works for the employer, they must also provide information about the debtor’s rate of pay and any prior liens. Wage garnishment then begins, typically deducting 25 percent of the judgment debtor’s disposable wages (after mandatory deductions).
Multiple Garnishments
If the judgment debtor has multiple garnishments, they are satisfied in the order they were served. Each garnishment must be settled before subsequent garnishments can take effect, as per Md. Code C.L. § 15-603.
Can the IRS Garnish My Wages?
The Internal Revenue Service (IRS) not only can but also does have the authority to garnish your wages, which they refer to as a “levy.” Unlike most creditors, the IRS does not need to file a lawsuit to initiate wage garnishment. Additionally, certain other creditors, such as those owed taxes, federal student loans, child support, or alimony, also have a statutory right to directly deduct money from your paycheck. The amount the IRS can garnish weekly depends on your specific tax situation.
What Can I Do to Stop Wage Garnishment in Maryland?
Stopping wage garnishment is most effective when done before it begins. However, even if the process is underway, you still have options. Consulting an experienced Maryland bankruptcy attorney is crucial to understand your rights and explore potential remedies. Here are two courses of action:
Filing for an Exemption:
Under Maryland law, you can file for an injunction for exemption relief in specific circumstances to protect or “exempt” a portion or all of your wages. If successful, the judge can reduce the garnishment amount or even cancel the garnishment order. It’s worth noting that this course of action is rarely successful.
Bankruptcy:
Bankruptcy can be a highly effective way to stop wage garnishment in Maryland. It provides a legal framework for individuals and families to regain control of their finances when debt becomes overwhelming. Here’s how bankruptcy can help:
Chapter 7 Bankruptcy:
Upon filing for Chapter 7 bankruptcy, the automatic stay goes into effect, halting all collection activities, including wage garnishment. This stay provides you with protection while you work to reorganize your debts. The trustee will review your case, and in most instances, your assets can be exempted under Maryland law, allowing you to keep your possessions, cars, and home. Once your case is successfully completed, a discharge order eliminates your debts and prevents future creditor actions.
Chapter 13 Bankruptcy:
Chapter 13 bankruptcy also triggers the automatic stay, providing relief from wage garnishment. In this process, you’ll have the opportunity to devise a 3 to 5-year payment plan to reorganize your debts and catch up on missed payments like mortgage arrears, car loans, and tax debts. Additionally, under certain conditions, it may be possible to recover some or all of the wages that were garnished.
Recovering Garnishments:
It’s worth noting that you may be able to recover some of your garnished wages under section 547 of the Bankruptcy Code. This provision allows you to recover payments made within 90 days of your bankruptcy filing if they provide the creditor with an advantage (preference) over other creditors in the bankruptcy case. To determine if this option applies to your situation, consult with your bankruptcy attorney.
Do You Have Questions Regarding Filing Bankruptcy in Baltimore? Contact The Law Offices of Nicholas J Del Pizzo
Navigating the intersection of bankruptcy and life insurance can be complex and requires the guidance of experienced professionals. At The Law Offices of Nicholas J. Del Pizzo, III, we understand the importance of protecting your life insurance assets while seeking relief from overwhelming debt. Our team of dedicated attorneys has extensive knowledge of bankruptcy laws and can provide tailored advice to ensure that your life insurance is appropriately accounted for during the bankruptcy process. With our expertise and personalized approach, we strive to provide the support and peace of mind you need during this challenging time. Contact A Baltimore Bankruptcy Attorney Today!