Facing mounting debt in South Dakota can be incredibly stressful, and for many, the threat of wage garnishment adds a layer of fear and uncertainty. The idea of a portion of your hard-earned wages being automatically taken to satisfy outstanding debts can feel overwhelming and leave you wondering how you will make ends meet or support your loved ones. If this reflects your circumstances, you may consider filing for bankruptcy. Please continue reading as we explore whether bankruptcy can halt wage garnishments and how our determined Rapid City Bankruptcy Lawyers can help you navigate your legal options for relief.
What is Wage Garnishment and How Does It Work in SD?
In South Dakota, wage garnishment constitutes a legal procedure whereby an employer is mandated by court order to withhold a portion of an employee’s earnings to satisfy an outstanding debt. Such debts may include obligations such as child support, delinquent taxes, or defaulted loans. To initiate the process of wage garnishment, a creditor must first secure a judgment against the debtor. In certain circumstances, such as with Internal Revenue Service (IRS) levies, a legal claim against the wages may suffice without a prior judgment.
It is essential to acknowledge that federal law imposes limitations on the amount that can be garnished from an employee’s paycheck to protect employee rights. Generally, creditors are permitted to garnish up to 25% of a debtor’s disposable income or any amount exceeding 30 times the federal minimum wage, whichever is lower.
While creditors can obtain a judgment to enforce wage garnishment, specific types of income are exempt from this process. Exemptions typically encompass Social Security benefits, unemployment compensation, workers’ compensation, and certain pensions, which are generally protected under both state and federal law.
How Can Bankruptcy Help Protect My Earnings?
When you file for bankruptcy in South Dakota, the automatic stay is triggered. This temporarily halts most collection activities by creditors. This means once you file your bankruptcy petition with the court, creditors must stop contacting you, pursuing lawsuits, or taking money from your paycheck. It should be noted that even if the garnishment has already started, future deductions will cease as soon as the automatic stay goes into effect. Depending on the circumstances, you may be able to recover wages garnished within 90 days before filing.
If you are facing multiple garnishments, it’s crucial to understand that bankruptcy will stop all concurrent garnishments, regardless of the number of creditors. Creditors must obtain court permission to resume collection efforts.
If you are facing ongoing wage garnishment, it’s in your best interest to contact an attorney at 605 Bankruptcy. Our legal team is prepared to help you file your petition accurately and stop garnishments quickly. Connect with our firm today to schedule a consultation.
