Did you know that it is possible to stop wage garnishment without filing for bankruptcy? In this article, we will discuss the options a debtor has to prevent a creditor from garnishing their wages. Read on to learn more about your available options.
Don’t Take Creditor’s Demand Letter for Granted
After obtaining a judgment, the creditor is required by law to send you a final warning letter before they start garnishing your wages. This letter, also known as the demand letter, is an important piece of document that should not be taken for granted. Your creditors will always prefer that their debtors make voluntary payments towards their outstanding debts rather than spending time and money on paperwork that goes into garnishment. This would be a good time to negotiate a settlement and clear your impending dues right before the garnishment begins.
Checkout State-Specific Options
Most states have individual laws that protect the debtors against garnishments. For instance, in the state of California, you can make a claim for exemption if you can prove that you are going through financial hardships. You need to demonstrate that your income is pegged towards supporting your family to qualify for an exemption. To know more about state-specific laws, you must contact the municipal/county court clerk or take help from a local attorney.
Seek Debt Counseling
You can stop garnishing by seeking consumer credit counseling service (CCS). A CCS is a non-profit organization that can help you negotiate a favorable agreement with the creditors and make payments over a period of time. If your creditors agree to this payment option, they can no longer garnish your wages, as long as you continue to make regular payments.
Know Your Rights
If your creditor has managed to get a judgment against you, then your best bet is to come out and play a level field. Don’t go into hiding because if you are employed, they will find a way to garnish your wages. You should also educate yourself about your rights so that you can fight them if the creditors are wrongly harassing you. For instance, if you are making less than $217.50/week, then the creditors are not allowed to garnish your wages. At the same time, they also cannot garnish so much of the income that prevents you from paying your basic utilities and child support payments.
The Creditor Fails to Follow Protocol
If the creditor did not follow proper garnishment process, then the court may terminate the order. For instance, the creditor’s failure to give timely notice of garnishment can be termed as improper protocol.
Arrange a Settlement Plan
It is better to prevent the wage garnishment than to stop it. So if you are unable to pay your debt in full but capable of making part payments, then it is advised to come up with a settlement plan. In most wage garnishment cases, the creditor is always more keen to work it out with you rather than filing for garnishment. If you are able to pay in full to pay off the debts, then that is the quickest way to terminate the garnishment process. However, you can also discuss an installment plan with your creditors to make part payments each month.
File an Objection & Come Prepared
If the court order for wage garnishment has been initiated, then you can raise an objection and request a hearing in the court. If the money proposed in the garnishment order is more than federal or state law applicable limit, then you should object to the garnishment immediately. However, before you come for your hearing, make sure that all the information you have is accurate.
Dispute the Judgment
If you have good reasons and a legal basis to challenge the underlying judgment, then do so immediately by taking help from a local attorney. You will not be able to challenge the judgment on the day of the hearing. Therefore, it is important that you act quickly.
Don’t Stop Negotiating
Even after the garnishment procedure has started, you can still negotiate a settlement option with the creditor. For instance, if your financial circumstances change and you are able to pay off some of the judgment, then you can still convince the creditor from canceling the garnishment in exchange for a settlement plan.
If all else fails, you can always file for bankruptcy that will immediately terminate the wage garnishment. However, avoid doing this in haste as it can have a debilitating impact on your future creditworthiness.