When a creditor garnishes a debtor’s wages, federal and state laws place a limit on how much money a creditor can take out of each paycheck. While federal law prohibits creditors from taking more than 25 percent of the debtor’s income, Illinois state law reduces that limit to 15 percent. The garnishments are taken out of the debtor’s paycheck after all other deductions have been made.
Once you file for Chapter 13, the creditors that are listed on your application will be notified of your case. At that point, those creditors are no longer able to contact you or garnish your wages. If you notice that a payment has been taken out of your paycheck after you have filed with the court, you should contact your attorney as soon as possible. Our office will speak with your company about stopping the garnished wages and may contact the creditor as well.
To find out more information about filing for bankruptcy and garnished wages, visit our Chapter 13 bankruptcy page.