Can unemployment be garnished?

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Can unemployment be garnished?

I have a chronic condition that has me hospitalized 2 or 3 times as year and even though I am insured I have ended up with huge hospital bills. I have no other debt except for medical. I have tried working with the collection agencies and I have paid back thousands of dollars but recently had my paycheck garnished. I just received a summons for court for another collection company and I just found out I will be laid off indefinitely at the end of the month. I have been afraid of filing bankruptcy because of the chronic condition. Chances are I would end up right back in the same position again. My husband is disabled and receives social security disability. I would be able to draw unemployment and will probably file for my own disability when it ran out. Even though the bills are all mine, we have a joint banking account so is my husbands disability at risk too or is his income exempt for medical bills? Can my unemployment be garnished? If all income is exempt and I will probably not get a job ever again, why would I file bankruptcy at all. And if there’s compelling reasons to file bankruptcy, do I have to file before going to court on this summons I just received?

Asked on June 13, 2011 under Bankruptcy Law, Oregon

Answers:

M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

I am so sorry for your situation. From the way that you have written the facts here it seems as if bankruptcy will be only a short term fix for something that will continue and build.  But I do think that you should seek advice from a bankruptcy attorney.  Keep in mind that there are two types of bankruptcy, one that dissolves debt and one that "reorganizes" it to allow for a structured payment at a reduced rate.  But you can not keep filing for bankruptcy every year.  Now, the general rule as to unemployment benefits are that they are exempt from garnishment. Generally, only if the order for garnishment was for child or spousal support, or if you owe the state that is issuing the unemployment benefits, would they qualify for garnishment.  The joint bank account is at stake and you need to file an exemption with the bank and the creditors as to his disability. May I suggest a credit counselor here? Good luck.


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