Wage garnishment is a legal method of collecting a debt. Generally creditors are prohibited from garnishing a debtor's wages without first obtaining a judgment against the debtor. To obtain a judgment, a creditor must file a lawsuit against the debtor and prove to the court the amount of the debt owed and that the defendant named in the lawsuit is legally obligated to repay the debt.
Under North Carolina law, wage garnishment is not available to most creditors, including credit card companies and other general creditors. The only creditors who may garnish a debtor's wages are those who are owed debts arising from:
Keep in mind that if a judgment has been entered in favor of a general creditor by a court in another jurisdiction and the debtor later moves to North Carolina, the creditor has the right to garnish the debtor's wages.
North Carolina has established strict wage garnishment limitations. Generally, these limitations exempt certain types of income from wage garnishment including:
Moreover, North Carolina law exempts from garnishment 100% of a debtor's wages earned within the previous 60 day period.
Filing bankruptcy is the most effective way to stop wage garnishment. When a debtor files bankruptcy, the automatic stay goes into effect immediately. The automatic stay prohibits all creditors from initiating or continuing collection efforts, including wage garnishment, against a debtor.
Another benefit of filing bankruptcy is that in some instances a debtor may be able to avoid a judgment lien. If a debtor wishes to avoid a judgment lien, he must file a Motion to Avoid Lien. If the motion is granted, the judgment will be treated as an unsecured debt and may be reduced or wiped out altogether.
If your wages are being garnished, you should contact a debt settlement attorney immediately. A North Carolina debt settlement attorney will review your case and advise you of all options for stopping the garnishment.