In the previous blog post, the question of whether filing bankruptcy can stop a garnishment collection was addressed. As discussed, many types of garnishments can be stopped by the mere filing of a bankruptcy case because an automatic stay will effectively suspend, if not end, any such collection. However, recovery of some priority debts via garnishment such as alimony or child support will not be stopped by the automatic stay.
In New Mexico, creditors cannot get a wage garnishment order until they obtain a court judgment stating that the debtor owes the creditor money. Creditors seeking to recover, for example, on credit card payments or charges in a hospital bill cannot garnish the debtor’s wages until they sue the debtor and win a judgment.
However, there are a few exceptions to this rule. A debtor’s wages can be garnished without a court judgment for:
- unpaid income taxes
- court ordered child support
- child support arrears, and
- defaulted student loans.
New Mexico, like other states, allows creditors to collect certain judgments or debts via the garnishment process. But the state law places limits on the amount creditors can take from a debtor’s income. In New Mexico, they can either (a) garnish up to 25% of your wages to apply to your debts (b) or the amount by which the debtor’s weekly disposable earnings exceed 40 times the federal hourly minimum wage (currently $7.25/hour). For the purposes of determining the amount, “disposable earnings” are those wages left after your employer has made deductions required by law such as federal and state income taxes and social security deductions.
In Albuquerque, Giddens & Gatton Law, P.C. has bankruptcy attorneys who offer expert handling of Chapter 7, Chapter 11, Chapter 12 and Chapter 13 bankruptcy cases in New Mexico. The firm represents many debtors and creditors in Albuquerque, Santa Fe, Taos, Raton, Farmington, Gallup, Grants, Roswell, Los Lunas, Placitas, Belen and the rest of New Mexico. Contact Giddens & Gatton Law, P.C. at (505) 633-6298 to set up an appointment with one of its New Mexico bankruptcy lawyers or visit the firm’s website at giddenslaw.com. Giddens & Gatton Law, P.C. is located at 10400 Academy Road N.E., Suite 350 in Albuquerque, New Mexico.