What To Do When A Creditor Garnishes Your Wages

With the cost of living on the rise and wages trailing far behind, people can end up unable to pay their bills. Basic living expenses like mortgages, rising rents, and utilities can eat up an entire salary, leaving no funds for other bills. Unfortunately, not paying those bills can result in garnished wages.

Having your wages garnished can make you feel defeated and drained, especially when others depend on you for financial support. When someone else can take part of your paycheck without your permission, it’s difficult not to feel violated. However, it’s not the end of the world, and there are options for relief.

If you’ve been sideswiped by a creditor with wage garnishment and don’t know what to do, here are some practical tips for staying focused on resolution:

  1. Contact a qualified bankruptcy law firm first

A bankruptcy lawyer can help people facing all kinds of financial distress. Whether you’ve just realized you can’t pay your bills or a creditor has already started garnishing your wages, it’s not too late to get help.

The most important thing a lawyer can tell you is you have options. For example, many people going through bankruptcy qualify for an automatic stay of collections. This means creditors must cease wage garnishment when you’ve filed for protection from the Bankruptcy Court.

Wage garnishment

The United States Department of Labor (DOL) defines wage garnishment as, “Any legal or equitable procedure through which some portion of a person’s earnings is required to be withheld for the payment of a debt.”

They further explain, “Most garnishments are made by court order. Other types of legal or equitable procedures for garnishment include IRS or state tax collection agency levies for unpaid taxes and federal agency administrative garnishments for non-tax debts owed the federal government.”

When you owe an overdue debt, it’s not just your regular paycheck that can be garnished. For instance, when you owe a Federal debt, your tax return can be taken to pay that debt.

Administrative wage garnishment – no court order necessary

If you owe money to a Federal agency, that agency can garnish your wages without a court order. State laws do not apply in this case. You are entitled to a hearing; however, the order might be put in place prior to the hearing.

There are circumstances that can prevent federal agencies from garnishing your wages. For instance, if you haven’t been in your current job for twelve months and you were involuntarily separated from your last job, your wages cannot be garnished under AWG. There are also exemptions for financial hardship.

Attempting to figure it out on your own will only create more frustration. Contact an experienced Terre Haute bankruptcy attorney to have someone on your side who knows the law.

  1. Don’t get too comfortable with your other creditors

If you’ve stopped paying your bills, and a creditor has obtained a judgment to garnish your wages, don’t make the mistake of thinking your other creditors won’t do the same. If you haven’t already contacted a qualified bankruptcy lawyer in Terre Haute, that’s the first call you should make. A skilled attorney can discuss your case in detail to help you find the most efficient solution to the problem you’re facing.

Creditors don’t always wait to sue their debtors

It seems like suing a debtor would only be pursued after all other options have been exhausted, but that’s not always the case. Wage garnishments aren’t always a creditor’s last resort. It can happen quickly and unexpectedly. You might be negotiating with your creditor over the phone to pay your outstanding debt, while they’re filing paperwork to obtain a money judgment from you.

If your debt is overdue, a creditor can sue you at any time, without warning. Don’t get too comfortable. Talk to an attorney to find out what you should do to prevent other creditors from obtaining additional money judgments.

  1. Consider filing for bankruptcy

You might be able to find relief through filing for bankruptcy. There are other alternatives, but only a professional attorney can help you decide what’s correct for you. Don’t’ be afraid to consider bankruptcy just because it stays on your credit report for a while. Bankruptcy is an opportunity for a fresh start.

There are pros and cons to every decision you make for your financial future. Thankfully, a lawyer can help you navigate your situation and make the right decisions.

If your attorney does recommend filing for bankruptcy, be prepared to take a credit counseling course as part of the process. This is a great way to show good faith, as well as learn more effective ways of handling your debt.

Bankruptcy can put a stop to money judgments on your bank account and garnished wages, so it’s worth considering. Be open to the possibility when speaking to a lawyer. Bankruptcy can be the new beginning you’ve been asking for.

  1. Stay calm and centered

Remaining calm when your money is being sucked away by a creditor without your consent seems hard, but it’s the best thing you can do. Stress will never solve your problems, and allowing yourself to get agitated will just make it harder for you to communicate with your creditors or your lawyer.

All creditors are bound by the Fair Debt Collection Practices Act, although they may count on consumers being unaware of their rights. Your creditors might use unethical tactics to collect, like trying to force you to agree to pay a higher interest rate than your original agreement.

The good news is, once you have a lawyer, they’ll communicate with your creditors or collection agencies on your behalf. All you need to do is let them know you’re being represented by a lawyer; they’re legally obligated to respect that relationship.

Connect with a Rowdy Williams bankruptcy attorney right away to find out how you can obtain relief from wage garnishment, and prevent further money judgments against you. It’s never too late to have a lawyer on your side to help you resolve your debt as painlessly as possible.