A creditor who has obtained a judgment against you can garnish a paycheck or bank account, or both. The creditor must file garnishment affidavit at your bank, at which point the bank will pay that creditor whatever amount is available in your account, up to the amount of the judgment. A creditor will drain your account completely if the judgment meets or exceeds the amount in your account.
Wage garnishments, or payroll garnishments, are a bit different. State laws limit wage garnishment to allow the wage-earner money for living expenses. Your jurisdiction’s garnishment laws set the maximum percentage at which your paycheck can be garnished.
In Virginia, Maryland and the District of Columbia, the maximum percentage is capped at 25 percent of disposable earnings. And in Maryland and D.C., judgment creditors must also send a statement each month to the debtor and employer. The report should show application of payments to interest, principal, attorney’s fees, and costs. No such requirement exists in Virginia.
Bankruptcy Stops Garnishment
Filing bankruptcy immediately stops garnishment of both wages and bank accounts. But it is better to pay close attention during the collection process. If a creditor has obtained a judgment against you, the next step is to attach that judgment to your assets. And a judgment creditor will garnish a paycheck or bank account as quickly as possible. So long as you owe that debt, then your assets will be vulnerable. Filing bankruptcy protects your income and assets from garnishment. In many cases, we will be able to recover some or all of the garnished funds owed to you.
