Understanding Garnishment Limitations in Colorado
Only a limited amount of your wages can be garnished. The law offers garnishment protection for a portion of your wages so that you can still pay for living expenses. In Colorado, only up to 25% of the disposable income you earn in one week can be garnished. This rule is true even if there are multiple creditors with their own garnishment orders. “Disposable earnings” refer to your take-money pay, or the amount left over after deductions required by law, such as federal income tax, Social Security tax, and state and local taxes. Deductions taken from your paycheck for health insurance or union fees are not legally required, and these amounts are counted towards your disposable earnings.
There are special limitations if you owe child support. The amount that can be garnished depends on whether you have to support other family members or if the arrearages are over 12 weeks old.
Note that:
- 50% of your disposable income is subject to garnishment if you are supporting another spouse or child.
- 60% of your disposable income is subject to garnishment if you are not supporting another spouse or child.
- An additional 5% can be garnished if there are outstanding arrearages over 12 weeks old.
If you have low income, Colorado has a calculation to determine the garnishment amount. This amount may be less than 25% of your earnings. For low-income debtors, it is a sliding scale – the lower your income, the less that is subject to garnishment.
What Happens If There Are Multiple Garnishments?
If there are multiple creditors with garnishment orders, they are generally taken in the order that the employer received them. The exception is child support – garnishment for child support always takes priority.
Identifying Garnishment Exemptions
One way that you may be able to stop the garnishment is by filing an exemption claim with the court. Not all income can be garnished under Colorado law. After the exemptions are applied, some, if not all, of your earnings may be protected from garnishment.
Earnings that are generally exempt from garnishment include:
- Social Security benefits
- Social Security Disability benefits
- Workers’ compensation
- Pension or retirement benefits
- Unemployment insurance benefits
- Child support
- Tax refunds
Some of these types of income can be garnished for certain debts, including unpaid child support, spousal support, repayment of public assistance, or debts to certain government agencies.
It is crucial to act quickly after the judgment. You can only object to a garnishment order for a limited amount after the judgment. If you fail to object, the creditor will be able to take the money, even if the funds should be exempt. If you do object and the judge finds that an exemption applies, the garnishment amount will be reduced or eliminated.
Stopping Wage Garnishment by Filing for Bankruptcy
One way you can stop wage garnishment is by filing for bankruptcy. Immediately after you file for bankruptcy, an automatic stay is put in place to stop creditors from pursuing collection — including wage garnishment. Once an automatic stay is in place, your employer must stop sending your wages to the creditor. The creditor must even return any money that was accepted after you filed for bankruptcy. Not only will bankruptcy stop wage garnishment, but some of the debts that are being collected could be discharged. Not everyone is eligible to file for bankruptcy, so it is essential to discuss this option with an attorney.
Understanding Wage Garnishment in Fort Collins
In Fort Collins, many residents face financial challenges that can lead to overwhelming debt. From unexpected medical expenses to job loss, these hardships can quickly escalate and result in wage garnishment. In light of this, it’s important to know that there are ways to stop wage garnishment and regain control of your finances.
Local resources, such as the City of Fort Collins and the Colorado Department of Local Affairs, provide information on financial assistance programs to help residents navigate tough times. Sometimes, local resources alone may not suffice. What many people don’t realize is that there are legal options available to stop wage garnishment, such as filing for bankruptcy.
If wage garnishment is affecting your ability to make ends meet, don’t let it dictate your financial future. Understanding your options and taking action can help you regain control of your finances. Whether it’s exploring bankruptcy or other solutions, an experienced attorney can guide you through the process and help you work toward financial stability in Fort Collins.
When to Reach Out to a Fort Collins Wage Garnishment Attorney
Once you receive your court summons, you should immediately find a bankruptcy attorney skilled in garnishment protection. Action must be taken quickly to stop your wages from being garnished. If you wait until after a judgment is entered against you or until you notice 25% of your paycheck is missing, it could be too late to protect you from garnishment.
If your creditors have started to take legal action against you, I encourage you to reach out to me today. Do not sit on a garnishment order, because you could lose or limit your rights.
Give me a call at (970) 293-8371 now to get started on your case.
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