If your wages are being garnished, there a few options to stop it. This article explains what wage garnishment is, how it happens, and how to stop it.
Wage garnishment happens when a court issues an order requiring your employer to withhold a portion of your paycheck and to send it directly to a creditor that you owe.
In general, your paycheck continues to be garnished until the debt is paid off in full or otherwise resolved.
Garnishment usually happens when a creditor sues you for an unpaid debt and wins in court. Garnishment frequently happens when debtors do not appear in court, allowing the creditor to win a default judgment.
Once the creditor has won in court, the court will mail a notice to you and your employer about what is happening. Don’t be embarrassed that your employer knows you’re being sued over a debt. This happens more often than you think - approximately four million Americans had their wages garnished over debts in 2013, according to Pro Publica.
Individuals making between $15,000 and $40,000, you are most likely to experience garnishment. So you are not alone! The best practice is for you to have a conversation with your employer or HR department to keep them posted on what’s happening and what you’re doing to resolve it.
A garnishment of your paycheck will begin soon after the notices are sent, from anywhere from 5 to 30 business days. The garnishment continues until the debt is paid in full. Sometimes court fees and interest are tacked on to this amount.
Sometimes, garnishment can happen even without a court order, if you owe child support, back taxes or unpaid federal student loans.
The amount of your wages that can be garnished varies depending the type of debt owed.
One strategy to deal with the wage garnishment is simply to pay it off: either in installments or by borrowing from friends and family to pay it in one lump sum. If that’s not possible, there are three other ways to stop the wage garnishment.
1. Negotiate with your creditor One way to end your wage garnishment is to call your creditor and get them to agree to a repayment plan.
Look at your budget and see what you can pay. Then can call your creditor and see if they will agree to a repayment plan for you to pay a lower monthly amount than the garnishment. This is often a successful strategy.
2. Challenge the garnishment If you believe the judgment was entered wrongly or is caused undue harm to your personal finances, you can challenge the garnishment in court on a number of possible grounds.
But to do this you have to act quickly. Depending on your state you may have as little as five business days to file your response, contesting the garnishment order.
3. Erase the Garnishment with a Fresh Start If you’re buried in debt and cannot pay your basic living expenses, solving the wage garnishment may only be temporary relief.
The broader issue could be that you need a fresh start. If so, consider the pros and cons of Chapter 7 bankruptcy. If bankruptcy makes sense for you, filing will temporarily stop wage garnishment while your bankruptcy case is pending. The creditor will receive notice from the bankruptcy court to stop garnishment shortly after you file.
And if the debt for which you are being garnished is dischargeable like a credit card debt, then it will be erased in the bankruptcy process, which ends the garnishment permanently.
Wage garnishment is a common problem for millions of Americans. It can be deflating to have your wages garnished. But you do have options to protect yourself.
You may decide to settle or legally contest the garnishment. Or you may need deeper debt relief like a bankruptcy filing to eliminate the garnishment entirely.
If you are in serious financial debt and need free bankruptcy help from our nonprofit Upsolve, click here to get started.