When you’re dealing with an overwhelming debt load, you can be put in the position where you have to decide between paying the rent and covering your credit card arrears. If this sounds like your situation, you’re not alone: the pandemic has forced thousands of New Yorkers to ignore their credit cards, medical bills, and other debt and focus on covering the essentials.
The problem is that when creditors go unpaid, most states, including New York, allow them to collect the debt by garnishing your wages. The New York Attorney General has confirmed that income like stimulus checks and other economic impact payments issued under the CARES Act cannot be garnished, but otherwise there has been no impediment preventing creditors with a judgment from collecting on it. For months, the closure of the New York state courts prevented new judgments from being obtained, but since they reopened, this protection has disappeared.
In this blog, we’ll explain how the process works, how much a creditor can legally garnish, and how bankruptcy can make it stop.