How to Avoid Garnishment of Wages
Garnishment of wages refers to when the courts or a legal entity, such as the Department of Education or the IRS, orders your employer to withhold a portion of your pay to satisfy a debt you owe. The institution would rather to work with you than garnish your income. Wage garnishments are usually an effective last-resort method to get you to pay off debt. If you take certain steps, you can prevent the garnishment.
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Instructions
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Pay the amount due in one full payment. This will immediately put your balance at zero and stop any collection procedure that might have begun. If you need some time to come up with the money, let the institution know. It might be willing to stall collection activity to allow you the time needed.
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Set up a payment plan. Most creditors can set you up with an installment agreement. Create a spending plan with your income and monthly expenses. This will give you an idea of what you can afford to pay toward the debt. Then, contact the creditor and make an offer. Keep good records detailing the date you called, whom you spoke with and what was discussed. If the creditor refuses your offer and you cannot afford what it's asking you to pay, you can argue your case in court.
Creditors must have a court order to garnish your wages. Before granting a judgment, the courts send you documentation advising you of the litigation. The paperwork also has instructions on how to file an answer so you can present your case to the judge. If you can prove to the judge that your income and expenses do not allow you to pay more than you are offering, he may order the creditor to accept your offer.
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Contact the institution itself, if it is a government entity, such as the IRS or the state. These institutions can offer you an installment agreement. If you have financial hardship, you will have to reveal your income and monthly expenses. If hardship is determined, the institution can offer you a reduced payment, or stop collection activity until you are in a better financial position.
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File bankruptcy. Filing Chapter 7 stops existing wage garnishments and those in progress, according to BCS Alliance. As long as the court permits the debt to be discharged, Chapter 7 cancels the garnishment. Consult a bankruptcy lawyer when using this method. Chapter 7 stays on your credit report for 10 years, according to Experian.
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Tips & Warnings
If the wage garnishment is in effect and you do not agree with it, file an appeal with the institution listed on the garnishment paperwork. File the appeal within the time frame indicated. Your employer cannot stop the garnishment until the issuing institution orders it to.
References
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