Money Tips: Here is What To Do If Your Wages Are Garnished Your wages are important for you and your family. They provide you with the financial means to pay for your housing, food and entertainment expenses. Without your wages, you may experience financial instability One thing that can compromise your financial security is the
Money Tips: Here is What To Do If Your Wages Are Garnished
Your wages are important for you and your family. They provide you with the financial means to pay for your housing, food and entertainment expenses. Without your wages, you may experience financial instability
One thing that can compromise your financial security is the threat of a wage garnishment. In fact, millions of people are faced with this predicament each year.
Wage garnishment is a legal action that is taken by a creditor to recover money from a legal judgment. Companies or people who have judgments against you can use wage garnishment to take their money from your paycheck. Common causes of wage garnishments include:
- Civil judgments
- Unpaid taxes
- Past-due child support
- Credit card debts
- Personal loans
- Student loans
If you are currently facing wage garnishment, you should take immediate action to save your finances. Here are some actions that you can take if your wages have been garnished or you have been threatened with wage garnishment.
In some states, creditors can garnish up to 25 percent of your wages. Depending on your earnings and expenses, you may not be able to afford to live on the remainder of your paycheck.
One thing you can do is file Chapter 7 bankruptcy to stop debt collections and eliminate the debt altogether. This is a good option for you if you don’t mind going through a season of bad credit.
Filing bankruptcy may be a good option if it will take a few years to repay the debt. If your wage garnishment will be completed within 6 months, it may be a good idea to forgo a bankruptcy filing and repay the debt.
Keep your job.
Some people quit their jobs after their wages have been garnished. This isn’t a good idea for a few reasons. Quitting your job doesn’t get rid of the debt or the judgment. The only thing it will do is delay the consequences of the judgment.
If you quit your job, how will you pay for your living expenses? By quitting your job, you will create additional financial problems. Getting a title loan becomes more difficult without a job, but title loans with no income are still possible if you meet other requirements.
File an objection to your court judgment.
A mistake that many people make is they ignore the judgment notice or fail to show up for the court proceedings. Taking this action limits their rights and makes them vulnerable to adverse action.
When you receive a judgement, you should take every legal action possible. After a judgment has been rendered, you can contest the court’s ruling based on a number of reasons including:
- Improper execution
- Undue financial harm
The court provides you with a specified amount of time after a judgment to respond to it. It’s important to respond by the deadline.
Research the wage garnishment laws in your state.
If you don’t have legal counsel, you must protect your own rights. Use the internet or your local law library to find out about the local wage garnishment laws.
Your state may have exemptions that protect a portion of your income. This means that there may be a limit to how much money a creditor can garnish from your wages.
Earn additional income.
After you have exhausted all of your legal options, you may have to come to terms with the fact that you have to pay the garnishment. One way to make it easier is by earning additional money.
Not only will you be able to lessen the financial impact of the wage garnishment, you may be able to repay your creditor quickly. Although getting a part-time job will limit your leisure time, it will reduce the financial burden of a wage garnishment.
Not sure about what you can do to earn extra money? Here are a few ideas.
- Become a handyman.
- Become a pet sitter for busy pet owners.
- Tutor children and adults at your local library.
- Buy items and sell them for a profit on auction sites or craigslist.
- Invest in clean energy stocks.
There are so many ways to earn additional money. If you set aside a few hours after work, you can come up with tons of great ideas.
Negotiate with your creditor to settle the debt.
If you owe a creditor $10,000, it can take over three years to repay the debt if you pay $250 per month. That’s a long time.
Many creditors would rather have a lump sum payment than small monthly payments. Contact your creditor to negotiate a settlement. You may be able to settle the debt at a fraction of the total debt.
Understand the garnishment process.
Since wage garnishments are approved by local courts, all creditors must follow a process. Creditors can’t garnish your wages on a whim. Here’s the process in most states.
- Creditor sues you in court.
- The judge issues a ruling in the creditor’s favor.
- Creditor receives a court order to garnish your wages.
- Creditor and court notifies you of the intent to garnish your wages.
- After the writ of garnishment has been issued, you may be able to appeal the decision.
It is important for you to remain calm and take strategic actions if you are facing a wage garnishment. These money tips can help you get through this financial challenge.