New Jersey Bankruptcy Lawyer Daniel Straffi Explains Wage Garnishment and Credit Card Debt Collection

March 10, 2025 at 13:02 PM EDT

New Jersey bankruptcy lawyer Daniel Straffi (https://www.straffilaw.com/can-credit-card-companies-garnish-your-wages/), of Straffi & Straffi Attorneys at Law, provides an in-depth look at wage garnishment and the legal options available to debtors facing collection efforts. Credit card debt can quickly become overwhelming, especially when creditors take legal action to recover unpaid balances. Straffi explains how credit card companies pursue court judgments and highlights key protections under New Jersey and federal law.

Wage garnishment is one of the most serious consequences of unpaid credit card debt. While credit card companies cannot automatically garnish wages, they can file a lawsuit and obtain a court order requiring an employer to withhold a portion of a debtor’s paycheck. New Jersey bankruptcy lawyer Daniel Straffi outlines the legal process, emphasizing that debtors have opportunities to respond before garnishment begins. Straffi stresses that understanding these steps can help individuals take proactive measures to protect their income.

According to New Jersey bankruptcy lawyer Daniel Straffi, the amount that can be garnished depends on federal and state laws. Under the Consumer Credit Protection Act (CCPA), private creditors can garnish up to 25% of disposable income or any amount exceeding 30 times the federal minimum wage, whichever is lower. However, New Jersey law imposes stricter limitations, capping garnishment at 10% of disposable income for individuals earning less than 250% of the federal poverty level. “These state-imposed limits provide greater financial relief for low-income earners,” said Straffi.

The process of wage garnishment begins when a debtor falls behind on credit card payments. After multiple missed payments, credit card companies may transfer the account to a collection agency or file a lawsuit. If the creditor wins the case, the court issues a judgment that legally enforces debt collection.

Daniel Straffi explains that New Jersey residents facing credit card lawsuits have a set period—typically 35 days—to respond to the court complaint. Ignoring the lawsuit often results in a default judgment, allowing the creditor to request a wage garnishment order. Once the court grants the order, the debtor’s employer is required to deduct the specified amount from their paycheck until the debt is fully paid or another legal action stops the garnishment.

While credit card companies must follow legal procedures before garnishing wages, some debts, such as unpaid taxes and federal student loans, do not require a court judgment. Government agencies, including the IRS and the U.S. Department of Education, have the authority to garnish wages without obtaining a court order.

In addition to wage garnishment limits, New Jersey law provides exemptions for certain types of income. New Jersey bankruptcy lawyer Daniel Straffi highlights that Social Security benefits, unemployment compensation, and workers’ compensation payments are protected from garnishment by private creditors. Other exempt sources include federal pensions, public assistance benefits, and child support payments received by the debtor.

Straffi also explains the impact of New Jersey’s statute of limitations on credit card debt. Creditors have six years from the last payment or transaction date to file a lawsuit for unpaid credit card balances. If they fail to take legal action within this timeframe, the debtor can use the expired statute of limitations as a defense in court. However, Straffi cautions that making a partial payment on an old debt can reset the statute of limitations, allowing creditors to restart the legal process.

Once a creditor obtains a court judgment, they have up to 20 years to enforce it. During this period, they can pursue wage garnishment, bank levies, or other collection methods. Straffi warns that some judgments may be renewed, extending the enforcement period even further. “It is crucial for individuals to understand their legal rights and explore options before a judgment leads to wage garnishment,” Straffi advises.

For individuals facing wage garnishment, there are several ways to challenge, reduce, or stop the process. New Jersey bankruptcy lawyer Daniel Straffi explains that filing an exemption claim with the court may help protect income from garnishment. Debtors can also negotiate a settlement with creditors or set up a payment plan to avoid wage deductions.

In some cases, filing for bankruptcy can provide immediate relief. Under federal law, an automatic stay is triggered once a bankruptcy petition is filed, halting all collection activities, including wage garnishment. Straffi notes that bankruptcy may not be the right solution for everyone, but it can be a valuable tool for those dealing with overwhelming debt.

New Jersey bankruptcy lawyer Daniel Straffi encourages individuals to seek legal assistance when dealing with credit card debt lawsuits or wage garnishment threats. “Legal representation can provide clarity and help determine the best course of action to protect your income and financial future,” Straffi says.

About Straffi & Straffi Attorneys at Law:

Straffi & Straffi Attorneys at Law is a New Jersey-based law firm dedicated to helping individuals manage bankruptcy, debt relief, and financial challenges. Led by New Jersey bankruptcy lawyer Daniel Straffi, the firm can provide legal guidance for those facing credit card debt, wage garnishment, and other financial difficulties. Through personalized legal strategies, Straffi & Straffi Attorneys at Law can assist clients in achieving financial stability and protecting their rights under state and federal law.

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Company Name: Straffi & Straffi Attorneys at Law
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Phone: (732) 341-3800
Address:670 Commons Way
City: Toms River
State: New Jersey 08755
Country: United States
Website: https://www.straffilaw.com/

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New Jersey Bankruptcy Lawyer Daniel Straffi Explains Wage Garnishment and Credit Card Debt Collection

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