Wage garnishment takes money directly from a paycheck to pay off a debt. However, wage garnishment in Maryland follows state rules that protect a portion of a person’s income.
These laws become important when someone files for bankruptcy. If you have concerns about how bankruptcy might affect your financial future, it is worth your while to fully understand Maryland’s wage garnishment laws.
What is Maryland’s wage garnishment law?
Maryland law allows creditors to take up to 25% of a person’s disposable income, which means the money left after taxes and other required deductions. However, if someone earns close to minimum wage, the law protects more of that income. This rule helps low-income workers keep enough money for basic needs. Even with these protections, garnishment can make it hard to pay rent, buy food or handle other expenses.
How does bankruptcy interact with wage garnishment?
Bankruptcy stops wage garnishment through a court order called the automatic stay. This stop happens as soon as the bankruptcy case begins. The automatic stay forces creditors to stop collecting, which includes any garnishment actions. As long as the case continues, the creditor must follow this order. If the creditor does not stop, you can take steps to enforce the rule.
In Chapter 7 bankruptcy, many debts are erasable. If the debt that caused the garnishment qualifies for discharge, the creditor loses the right to collect after the case ends. This means the garnishment does not start again. If you file Chapter 13 bankruptcy, you will agree to a repayment plan. This plan may lower the payment amount or stop garnishment altogether while the plan is in place.
In some cases, wage garnishment may create a reason to file for bankruptcy. If garnishment leaves too little income to live on, filing can offer a way to take back control. Maryland residents facing garnishment often choose to file to protect their income. Taking action quickly can protect your wages and lead to a fresh financial start.
