How Much Time Does It Take Before a Creditor Can Start a Garnishment?
Garnishment allows a creditor or debt collector to take money from a debtor’s bank account, or to receive a percentage of the debtor’s paycheck each pay period. It is the most effective form of debt collection possible, but requires the filing of a lawsuit and permission by a judge. Timelines for starting garnishment may vary by state, but usually debt collectors can begin garnishment a few weeks after winning a court judgment.
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Process
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Creditors and debt collectors unable to collect a debt may resort to a lawsuit in civil court. Debt lawsuits are easy for debt collectors to win if they can prove through documentation that the debtor owes the debt and has not paid it. A judge hearing the case will grant a monetary judgment requiring the debtor to pay a certain amount of money. State laws require courts to send court notices to the debtor informing the debtor of the judgment. The debtor then has a set amount of time to respond, usually a few weeks. If the debtor does not respond the creditor can proceed with garnishment with the approval of the judge.
Payment Plans
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It is essential that the debtor contact the creditor or debt collector about the judgment and attempt to work out a payment plan. Delinquent debts are often settled for significantly less than the full balance, but a creditor with a judgment will likely insist that the debtor pay the entire balance. The debt collector may agree to accept monthly payments, but may also demand a one-time fee for the agreement along with monthly finance charges. For most debtors such arrangements are usually better than garnishment.
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Banks and Employers
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Banks are not allowed by law to give customers advance notice about garnishment proceedings. That allows the debtor to possibly withdraw all money from the account so the debtor will not have access. Employers also cooperate fully with garnishment and will make regular deductions each pay period according to details in the garnishment orders.
Bankruptcy
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Some people with garnishment file for personal bankruptcy. Bankruptcy immediately ends garnishment through a legal order called the "automatic stay.” The automatic stay forces all debt collection activity against a debtor to end while the debtor’s finances are reviewed by a federal bankruptcy court. However, debtors should file for bankruptcy only as a last resort. Bankruptcy severely harms credit and remains on credit reports for 10 years.
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