What You Need to Know About Wage Garnishment
Wage garnishment is the result of not paying your credit card debt. When you don’t pay what you owe, creditors can come after you and legally confiscate your wages. It is the “last try” of the creditors to get what they are owed.
What is wage garnishment?
Wage garnishment is the act in which a court orders your employer to pay your creditors a portion of your paycheck. This isn’t done lightly: it’s a legal step that is only taken for serious matters. For the consumer, wage garnishment can be very disabling: it can cost you rent money, mortgage money, food money, gas money, and any kind of money you need for life’s basics. It can also be very embarrassing and leave a negative mark on your credit score.
How does wage garnishment happen?
If you refuse or simply can’t pay off your debt, your account will go into default mode and your creditor may choose to pursue legal action. They can file a lawsuit against you and a judge can order that your debt be paid through wage garnishment.
How much of the wages can be garnished?
There is a certain percentage of wages that can be withheld. This is usually dictated by the total disposable earnings of the employee at hand. The point is to allow the consumer enough money to live, pay rent, buy food, etc., and to pay taxes and social security. The remainder of the wages, those that are disposable, can be withheld.
Even so, there are limitations to wage garnishment. For instance, wages can’t be garnished for more than 25% or more than 30 times the minimum wage rate, as long as child support or alimony payments aren’t ordered. This rule protects people who make minimum wage, or something comparable. Retirement, social security, pension, and disability are also usually untouchable by wage garnishment.
What should you do if you’ve been sued?
If your wages are about to be garnished, it’s important for you to take a few steps. To begin with, attend court hearings so you can defend yourself. Hiring a lawyer is also good idea. If you can’t afford a lawyer, soliciting the help of a legal organization, particularly one that knows the ins and outs of wage garnishment, is a wise move.
If your wages are garnished, make sure you know your state’s laws. Some states may have a law that says your wages can only be garnished for less than your creditor is asking. It’s also important that - if your wage garnishment is impacting your life - you address the court and ask for a reduction.
How soon does garnishment happen?
Everything in the legal system takes time. But, this doesn’t mean you have a year worth of breathing room. Once it has been decided that your wages will be garnished, the ball will begin rolling. Sometimes it rolls fast, and sometimes slow, but it rolls nonetheless. If your wages are garnished, it’s important to remember that you will have to pay.
How do you keep your wages from being garnished?
Obviously, the best way to keep your wages from being garnished is to stay on top of your debt. This involves working out a plan with your creditor. Don’t ignore the situation. Instead, call your creditor and see if you can work out a payment plan. Many times creditors will be willing to work with you. Filing for bankruptcy is also another way to avoid wage garnishment. However, doing this can leave you financially devastated for years to come.
One of the best ways to deal with wage garnishment is to prevent it. Seek the help of a debt management or debt settlement company. These firms are staffed with professionals who will work as the mediator between you and your creditor. They are on your side and work to get your debt manageable.