About 11 million Americans are dealing with wage garnishment. Is garnishment threatening your paycheck?
Consumer credit card debt, child support payments, and medical debt are all reasons for wage garnishment. Is someone suing you for an unpaid debt?
Read on for information about stopping wage garnishment before it starts
About Wage Garnishment
If you’ve got unresolved debt with a creditor, such as a credit card company, the company can sue you for payment. If the company wins the judgment, the debt repayment comes straight from your paycheck.
Often, the creditor wins in court through a default judgment. This means you didn’t show up in court for the hearing, so the judge rules in the company’s favor.
The garnishment amount is sometimes as much as 25% of your disposable pay, depending on what state you live in. Federal agencies can take an administrative wage garnishment of up to 15% of your disposable pay.
Did you receive a notice alerting you that your wages are about to be garnished? You must act quickly. Garnishment starts as little as five days after notice.
Once the garnishment starts, it doesn’t end until the debt is paid in full. Immediate full payment isn’t usually an option for people who find themselves in this position.
If you think the judgment is in error, note how long you have before the garnishment goes into effect. Contact a lawyer who specializes in consumer law. A lawyer can tell you if fighting the judgment is worth your time and money.
Will the garnishment amount cause undue financial hardship? That’s another reason for challenging it.
Can’t get a lawyer? Head to the courthouse and get the paperwork yourself.
You’ll need to prove that you’re eligible for a reversal of judgment or a change to the wage garnishment. If you decide not to challenge the judgment, there are a couple of steps to take.
Pay off the Debt
Is it possible to get a low-interest loan from a family member? If so, get the money, pay the debt, and avoid garnishment.
Asking a family member isn’t easy but it’s often better than dealing with the garnishment. Tell them you’ll sign a contract for paying the money back and make your payments on time.
Call Your Creditor
Can’t pay the debt in full? Call your creditor. Negotiate a lower interest rate and affordable monthly payments.
Most creditors want their money back and are willing to negotiate.
Filing Chapter 7 Bankruptcy
It’s possible that filing for Chapter 7 bankruptcy is your best option. This will ruin your credit for up to 10 years but it will stop the garnishment and all collections. Discuss this option with a lawyer.
Dealing With Wage Garnishment
Wage garnishment is difficult and stressful. If you’ve received notice of a wage garnishment, take action quickly.
Contact a lawyer and find out if filing an objection is worth your time and effort. If it’s not, see about a loan from a family member to pay the debt off.
Before paying anything, negotiate with your creditor for a lower interest rate and reasonable payments. If all else fails, consider Chapter 7 bankruptcy. Use an experienced lawyer for this process.
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