First of all, try to work out a payment plan with the lender because it can solve all problems before starting the garnishment. You can also challenge the garnishment order or file for bankruptcy.
What is a wage garnishment?
Since many people have never experienced this, it is important to first explain what a wage garnishment is before looking for a solution to the problem. A wage garnishment is a way to collect debt. Thus, the department that processes your salary has to garnish a certain part of the salary. Most often, wage garnishment occurs when a lender (such as a credit company, bank, etc.) sues a customer / borrower for non-payment. Thus, the lender receives this amount in order to reduce the total amount of your debt. Of course, the creditor cannot garnish all of your wages, but even when he only withholds a part, it is rather frustrating.
How much of my salary can the lender garnish?
As already stated, a lender cannot garnish all of your wages, so there is a limit. Federal law states that the garnishment amount cannot exceed 25% of your wages. Also note that lenders cannot withdraw money from your bank account with a garnishment order.
How can I stop a wage garnishment immediately?
If you want to know how to stop a garnishment, there is one important point you must pay attention to. Before lenders or collectors can obtain a garnishment order, they must first obtain a judgment. Simply put, they must win the lawsuit in order to garnish a part of your salary. Therefore, it is a good option for you to sign up for a free credit counseling session at a non-profit organization near you. Experts can assess your financial situation and provide advice on how to avoid punishment. What’s more, they can even help you come up with a debt repayment plan. This way you can provide it to a lender or a bank.
Many people think that ignoring a lawsuit will make the situation easier, but this is not true. If the creditor or bank does not hear anything from you, they can ask the court to grant a judgment against you by default. In order to avoid a default judgment, you must definitely answer the lawsuit and file all the necessary documents. However, you should pay attention to the fact that in order to submit this document you will have to pay a fee from $ 30 to $ 300. In order to find out the specific amount, you can contact the court. Thus, after you submit your documents, the court will not be able to enter a default judgment against you.
What else can I use to get out of garnishment?
The first and most important thing you should do is negotiate a payment plan with your lender. If you understand that you cannot fully pay off the debt on time, you should discuss the problem with a law firm. You must tell them how much you can pay each month. Please also note that the firm may ask you to complete certain forms and provide information about your income and financial situation. That way, if you can work out an agreement, then you can get out of garnishment even before it happens.
Another option that you can pay attention to is the challenge the garnishment order in court. You probably know that after the court orders a garnishment, you will also receive a copy of the order and instruction on how to challenge a garnishment order. Depending on where you live, you may have about 5 working days to challenge it, otherwise your employer will have to garnish a part of your paycheck.
The last option you can use is bankruptcy. If you have a huge amount of debt and cannot pay your living expenses at the moment, then you should consider the advantages and disadvantages of bankruptcy. If you decided to file bankruptcy, then the wage garnishment has to stop as the creditor will receive notice that you are protected by the automatic stay from the bankruptcy court.