Stopping Illinois Wage Attachments

July 05, 2012

Struggling with debt and falling behind on bills is very common during these tough economic times. Unfortunately, creditors have many tools to use against you if you do not make timely payments.

First, they will likely report delinquencies to at least one credit bureau. This will likely have a negative impact on your credit score and make getting additional financial assistance even more difficult. Next, a creditor may seek a judgment and a court order to remove payments directly from your wages or bank accounts. This process is referred to as garnishment.

Wage Garnishment

Garnishment is a collection tool used by creditors to obtain the amount owed by debtors who for one reason or another are no longer able to make timely payments. Creditors are not allowed to take possession of more than 15 percent of the debtor's paycheck under Illinois law pursuant to an order signed by a judge. This limit was put in place so that people paying debts still have enough remaining income to take care of basic needs

In addition to wages, garnishment orders can also attach to bank accounts in a process referred to as a non-wage garnishment subject to your exemptions under Illinois law.

It is important to note that there are two other common additional types of debts that can result in garnishment without a law suit being filed: student loans and tax obligations.

It is possible to stop most court-ordered wage deductions by proving that the wage deductions began without the creditor complying with the law.

If garnishment laws were not followed before the order was issued, the order will likely be found void. A lack of compliance can be evident if the creditor did not properly notify the debtor of a pending garnishment filing or provide an opportunity to dispute the garnishment.

A garnishment order's validity will also hinge on the strength of the underlying judgment. For example, if the court that entered the judgment did not have jurisdiction to do so, the order will fail.

There are also certain restrictions on which funds can be used to satisfy a garnishment order. Certain forms of income are exempt and cannot be attached; this includes social security benefits, pension benefits, unemployment compensation and disability payments. If the order is being applied to this type of income, it should be challenged.

Wage Assignment

First, it is important to clarify whether the money taken is to satisfy a Court-ordered wage garnishment and not a wage assignment. A wage assignment is different from a wage garnishment. It does not require a court order, rather it is created when the loan is initially taken out. Wage assignments are most often used by sub-prime lenders, including "payday" loans and "title" loans.

If a law suit was not filed and money is being taken from your wages to pay a creditor, you may be party to a wage assignment, as specified above. When your monthly payments are behind, the lender sends you a 20 day "Notice of Intent to Assign Wages". This assignment can be cancelled at will under federal law and should be stopped before it goes into effect. Your goal is to stop the action within the 20 day period.

A "Wage Assignment" can be cancelled by informing your employer that you choose not to allow it to be honored. The most common acceptable method is by completing the "Affadavit of Defense" attached to the "Notice of Intent to Assign Wages" which is sent to you. It is always in your best interest to cancel the Wage Assignment in writing.

Bankruptcy Stops Wage Attachments

If these previous options are not available, it may be wise to consider filing for bankruptcy protection. Bankruptcy can offer those people who are struggling financially with a fresh start by either removing debt with a Chapter 7 petition or providing a more manageable repayment plan under a Chapter 13 petition.

When an individual files a bankruptcy, an automatic stay is put in place. The automatic stay is a court order that requires creditors to stop collection action. As a result, those creditors collecting debt through garnishment orders or wage assignments are required to cease and desist. However, current child support garnishments are an exception and they are allowed to continue.

There are ways to protect yourself from garnishment. Since each situation is unique, it is important to discuss your options with an experienced attorney to better protect your legal rights.

Article provided by Edwin L Feld & Associates, LLC
Visit us at www.edfeldlaw.com/