Wage garnishment affects as many as 1 in 10 workers in the United States. For those who have their wages garnished, getting ahead or staying on track can be exceptionally difficult. However, that doesn't mean you have to live with the effects of garnishment forever. There are many ways that you can put an end to your garnishment with the help of a qualified attorney.
What is Wage Garnishment?Wage garnishment is a debt collection tool often used as a last resort by creditors who need to be made whole. If you have an old debt, unpaid tax, or another payment arrangement that you have defaulted on, your creditor likely tried to remedy the situation directly with you. When that effort failed, they decided to pursue the case through court to get an order for garnishment.
An order for garnishment gives the creditor the first slice of your income. In other words, your employer will be required to take a portion of your regular paycheck and send it directly to the creditor before it ever reaches your bank account. The amount of garnishment can vary widely depending on the type of debt, the total balance, and your personal income level. Whatever the case may be, this situation should be avoided at all costs.
Stop Wage Garnishment Before It Begins
The best time to stop a garnishment is before it ever begins. If you have received a garnishment order, it is likely that you have put off paying an old debt for quite some time. Garnishment is always a last resort for creditors, and you will receive plenty of notice before a garnishment order is put into effect. During this time, you still have a chance to salvage the situation by reaching a settlement without the court's interference.
While there are certain exceptions for student loans and federal taxes, most other debts can be settled simply by reaching out to your creditor in writing and trying to work things out. As long as you are acting in good faith, your creditor is likely to grant you a new payment arrangement or a reduction in your balance owed if you pay in full immediately. If you are interested in settling, hiring an attorney to draft an offer on your behalf will help show that you are serious about taking care of your debt.
Offering a Settlement
If you acknowledge that the debt is yours to pay and that you've allowed it to go into default, the best thing you can do is try to figure out how much you can afford to pay reliably and work directly with your creditor. In almost every case, creditors would agree that receiving some of the money is better than receiving none at all. In addition, they know that suing you will cost them time and money, so they may be looking to save the effort if you are willing to come to the table.
The amount of your settlement needs to be reasonable, and the only way to determine what reasonable looks like is to have a knowledgeable expert look over your current finances and help you create a plan. Remember, reaching a new payment arrangement won't do you any favors if you start missing payments again in short order. Whatever offer you make, it needs to be something that you are certain you can keep up with.
What to Do After Receiving a Garnishment Order
Once you receive a garnishment order from the courts, your options become much more limited for settlement. In addition, since your creditor has already won the case against you, they are less likely to want to settle. Nevertheless, a qualified lawyer may be able to help reopen the lines of communication and reach a more favorable agreement.
Challenging a Garnishment
Even if your creditor has obtained a garnishment order against you, all is not lost. Every state has its own rules for how you can challenge the order in court. If you wish to do so, you must respond immediately to notify the court and the creditor that you are challenging the judgment. In addition, you need to hire a lawyer to help prepare you for court.
Challenging a garnishment is not as simple as telling the judge that the order is unfair. You must be able to prove that the order will produce hardship, or that you are not responsible for some or all of the debt due to earlier settlement agreements. Whatever the case may be, your attorney will need to put together a strong presentation to sway a judge who has already ruled against you.
Proving that the Garnishment Creates Hardship
By law, the amount of your garnishment order is limited to 15-25% of your disposable income. However, this calculation is done by the courts and does not necessarily take into account your other debts or obligations. Oftentimes, this is how people end up paying more in garnishment than they can afford, leaving them unable to pay their regular bills after their wages are withheld.
The best way to modify or stop a garnishment agreement is to prove that the original garnishment order is placing undue hardship on you and your family. In order to make a case for this, you must show that you have sustained a loss of income for other reasons or that your other obligations will be placed in default by the current order.
In addition to challenging a garnishment order for hardship, there are also certain exemptions that can be applied to your order, preserving more of your income. This is commonly the case if you receive social security income, disability, or alimony and child support from an ex-spouse. In most cases, a creditor can only garnish regular wages earned from a job, so you can hang onto the money that you've been awarded from other sources.
It should also be noted that courts can also give a garnishment order that affects your bank account. This is called nonwage garnishment and allows certain creditors to take money directly out of your bank account. These cases are less common and require additional help from an attorney to resolve.
Stopping Garnishment with Bankruptcy
Bankruptcy can have long-lasting effects on your credit and your ability to live a fruitful life, but in some instances, it is the best way forward. If you find yourself with too much debt and a garnishment that is eating away at your income, filing for bankruptcy is just one tool your lawyer may have to offer. Unfortunately, bankruptcy cannot stop all forms of garnishment, so it should not be relied on as a shortcut to solve your problems.
Child support and alimony are among the most common reasons for garnishment orders, but they are usually exempted from bankruptcy proceedings altogether, so tread carefully. On the other hand, most consumer and medical debts can be addressed through bankruptcy so you may have better luck stopping garnishment if that is the cause of your troubles.
If you have received a garnishment order or you know you have one coming, now is the time to get on the phone with a debt relief attorney. They can help you formulate a plan to save your income and settle your debts fairly. For more information, contact the team at Thomas K McKnight Law Office today and schedule your consultation.