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We practice CONSUMER BANKRUPTCY law exclusively. 

One of the top Bankruptcy Filers

in the Orlando Area

One of the top Bankruptcy Filers

in the Orlando Area

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  4.  » Clarification on wage garnishment and lump sum payments

There are many indicators that the economy is moving in a positive direction for Florida residents and across the nation. However, some consumers may have not experienced the improvements and are still struggling financially. Situations may have arisen where borrowers have been unable to repay their creditors. In these circumstances, a wage garnishment may occur.

A court may order a wage garnishment to repay a creditor by withholding part of a person’s wages. This amount will be sent directly to a creditor until the debt is satisfied. While some states have specific statutes addressing garnishments, there are clear guidelines established on a national level.

The United States Department of Labor administers the Consumer Credit Protection Act. The Act establishes limits on garnishment based on the disposable earnings of an employee. However, the limitations are not applicable for garnishments involving child support, bankruptcy orders or unpaid taxes.

One recent clarification about the definition of disposable earnings involves how to address lump sum payments from employers. While an employee’s wages are considered earnings, the question was whether lump sum amounts were protected. The Wage and Hour Division offered opinions on 18 different types of earnings and how they should be considered.

Receiving a notice for a wage garnishment can be overwhelming. Should a person receive one, it would be wise to contact a Florida bankruptcy lawyer as soon as possible. A knowledgeable attorney can help someone understand what is happening and offer guidance on how to proceed. A trusted lawyer will ensure that a client’s rights are protected throughout the experience.

Source: newsok.com, “Q&A with Brandon Kemp: Recent opinion letter provides employer guidance on garnishments and lump sum payments“, Paula Burkes, April 27, 2018