Wage garnishment is a means to collect money directly from your paycheck before you are paid. If you’re facing a wage garnishment, it’s likely you were having problems paying a creditor. Now there’s a judgment against you, and your employer must take money from your paycheck to pay this creditor.
Garnishments can leave you struggling to pay the essential living expenses. Fortunately, you still have options to stop wage garnishment. If you’re facing wage garnishment, there are steps you can take to stop the process.
Under Title III of the Consumer Credit Protection Act, extremely low earners are not subject to wage garnishments. In some states, the limits of wage garnishment are more consumer-friendly than federal protections. Many states have exemption laws designed to keep creditors from pushing debtors into poverty. You should check your state’s Consumer Affairs Department to know what protections are available to you.
Option 1 – Negotiate with the Creditor
The best time to stop a wage garnishment is before it happens. Try to negotiate a payment plan before a judgment is entered against you. A creditor may still work with you after the garnishment is in place, so it doesn’t hurt to ask.
Option 2 – Seek State-Specific Protections
In some states, if you can show that the money being garnished is needed for the essentials of life, then you may be able to stop the garnishment.
Option 3 – Fight the Judgement
There are some ways to vacate, or set aside, the judgment. If you think either the debt or the judgment is improper, you can file a motion to vacate the judgment and list the reasons why the judgment is invalid. One reason for a set-aside is that you were not properly noticed of the law suit. If the judgement is set aside, you will need to negotiate a payment with your creditor before they secure a new judgement.
Option 4 – Hire an Attorney
An experienced attorney can help you negotiate a settlement with your creditor or stop a wage garnishment by fighting a judgment or filing a bankruptcy action. Select attorney who understands wage garnishments and has experience in consumer credit issues.
Option 5 – Quit Your Job
If you do not receive a paycheck, then your wages can’t be garnished. This is an extreme step, but it may give you an opportunity for renewed negotiations with your creditor. This is only a short-term fix because the creditor will eventually find your next employer.
Option 6 – Declare Bankruptcy
Once you file for Chapter 7 bankruptcy, an automatic stay will end your wage garnishment, although you may have to alert the clerk of court and the creditor of the bankruptcy filing. You should not rush into this option because it has lasting impact on your credit, and may not discharge all your debts. Bankruptcy will suspend a garnishment for back taxes temporarily. Child support garnishments are unaffected by bankruptcy.
Garnishments can leave you struggling to pay the essential living expenses. Fortunately, you still have options to stop wage garnishment. If you’re facing wage garnishment, there are steps you can take to stop the process.
How Much of Your Wage Is at Risk?
Under federal law, creditors can garnish up to 25 percent of your disposable wage. Your "disposable wage" is the amount left after legally required deductions for taxes and Social Security are made. Garnishments for child support or back taxes may be withheld at a higher rate, up to 50 percent of your net pay.Under Title III of the Consumer Credit Protection Act, extremely low earners are not subject to wage garnishments. In some states, the limits of wage garnishment are more consumer-friendly than federal protections. Many states have exemption laws designed to keep creditors from pushing debtors into poverty. You should check your state’s Consumer Affairs Department to know what protections are available to you.
Stopping Your Wage Garnishments
There are steps you can take to stop a wage garnishment. The type of garnishment and your personal financial situation will determine what action is best. When in doubt, contact an experienced attorney or accountant since some of these options will impact your ability to get future credit.Option 1 – Negotiate with the Creditor
The best time to stop a wage garnishment is before it happens. Try to negotiate a payment plan before a judgment is entered against you. A creditor may still work with you after the garnishment is in place, so it doesn’t hurt to ask.
Option 2 – Seek State-Specific Protections
In some states, if you can show that the money being garnished is needed for the essentials of life, then you may be able to stop the garnishment.
Option 3 – Fight the Judgement
There are some ways to vacate, or set aside, the judgment. If you think either the debt or the judgment is improper, you can file a motion to vacate the judgment and list the reasons why the judgment is invalid. One reason for a set-aside is that you were not properly noticed of the law suit. If the judgement is set aside, you will need to negotiate a payment with your creditor before they secure a new judgement.
Option 4 – Hire an Attorney
An experienced attorney can help you negotiate a settlement with your creditor or stop a wage garnishment by fighting a judgment or filing a bankruptcy action. Select attorney who understands wage garnishments and has experience in consumer credit issues.
Option 5 – Quit Your Job
If you do not receive a paycheck, then your wages can’t be garnished. This is an extreme step, but it may give you an opportunity for renewed negotiations with your creditor. This is only a short-term fix because the creditor will eventually find your next employer.
Option 6 – Declare Bankruptcy
Once you file for Chapter 7 bankruptcy, an automatic stay will end your wage garnishment, although you may have to alert the clerk of court and the creditor of the bankruptcy filing. You should not rush into this option because it has lasting impact on your credit, and may not discharge all your debts. Bankruptcy will suspend a garnishment for back taxes temporarily. Child support garnishments are unaffected by bankruptcy.
