Does The Fair Debt Collection Pracctices Act Protect Against Wage Garnishment?
- January 13, 2014
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Many people facing bankruptcy wonder if the Fair Debt Collection Practices Act (FDCPA) will protect them from wage garnishment, unfortunately the answer is – no. The FDCPA is a law that places limitations on the methods that debt collection agencies can attempt to compel debtors to pay off their debts. For instance, the FDCPA limits the times that debt collectors can call debtors and it does not allow these agencies to make threats that they cannot legally act upon. If a debtor defaults on a loan, the lender will initially attempt to collect on the debt on their own. If initial attempts to collect on the debt fail, the lender will usually assign that debtor’s account to a collections agency. After the debt collector makes numerous attempts to get the debtor to repay his or her debt, it may institute a legal action against the debtor in court. If this happens, the debtor will receive a summons notifying them that they are being sued and they will have 35 days to answer the summons. If the debtor fails to respond to the summons, under New Jersey Court Rule 1:13-7, the court will enter a judgment against the debtor upon the creditor’s request. Next, the court may allow the creditor to garnish the debtor’s salary as a means to repay the debts that were the subject of the judgments. Under N.J.S.A. 2A:17-50, as long as a debtor makes more than $48.00 a week, a creditor may garnish his wages for repayment on a debt. The creditor who has received the legal judgment against the debtor will get a writ, or document from the court, and send it to the debtor’s employer notifying them of the wage garnishment. Under federal law, only 25% of a debtor’s disposable income may be garnished to satisfy a debt. A debtor’s income calculation, for the purposes of wage garnishment, does not include government entitlements and payouts such as social security payments, disability benefits, or other state benefits. If you are having trouble dealing with your consumer debt and would like to know more about the FDCPA or fear that your wages may be garnished to satisfy your debt obligations it is imperative that you seek the advice of experienced legal counsel to advise you on the issues concerning bankruptcy. For more information regarding the Fair Debt Collection Practices Act (FDCPA), when you should file for bankruptcy, Chapter 7 bankruptcy, Chapter 13 bankruptcy, foreclosure or any other consumer debt issues visit TheNJBankruptcyAttorney.com. This blog is for informational purposes only and not intended to replace the advice of an attorney.