ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel
  • »
  • Personal Finance»
  • Debt & Bankruptcy

Wage Garnishment Help

Updated on January 6, 2015

Wage Garnishment - Collection Agent Process

If you're behind in payments, the lender has the right to procure a judgment against you - at this point you need to know how to stop wage garnishment.

What Can a Collection Agency Go After?

Collection agencies are like sharks, they'll go after everything and anything they can get, this includes: property liens, freezing your bank account, or even a garnishment judgment against your paycheck.

Steps a Collector Must Take: There are steps and procedures a lender must take before they can approach the court. Major lenders don't usually do the dirty work, they generally end up selling delinquent loans to a collection agency once the account is 6 months behind. The collection agency pays pennies on the dollar for the debt. Since they have bought your debt at such a deep discount, they can use all kinds of tactics to try and collect the debt before they even consider garnishing your wages.

There are costs involved trying to procure a judgement and collection agencies have to make sure it's financially feasible before they pursue a judgement against you.

If they decide to go forward with the judgement, they must present all evidence in accordance with attempts to collect the debt. The judge will make a decision based on the evidence and if successful the collection agency will be granted their judgement.

The collection agency will send the judgement to your employer who will then notify you of the court order. Unless you take action, you will soon see a deduction in your paycheck in accordance with the judgement order.

Wage Garnishment Laws

There are federal laws and state laws governing how much can be taken from ones wages.

How Much Can Be Legally Taken From Your Wages?

The maximum guideline at the federal level is 25 percent.

The judge has discretion in these cases and each case is individually judged in accordance with these guidelines. Many states have lower maximum takes on wages and most times the judge will enforce the lower of the two rates.

Secured Debt: In the case where there is property (house, car, boat) the judge will order the property be sold to satisfy the judgement. If the proceeds do not satisfy the debt then the collection agency can move forward with the wage garnishment process.

What Are The Chances of a Wage Garnishment?

Consumers have racked up some pretty big debts and it's becoming more financially feasible to go to court to procure a judgement.

If you're dealing with a government agency, like the IRS, then the odds go way up - they don't really care how much it costs, they're using our tax dollars to pay the bills. Think about it - they are using your tax dollars to take you to court...ironical.

Of course the best thing is not to let the situation get to this point, but if it does you will probably need garnishment help. Your next step is finding a a wage garnishment attorney.

Stopping Garnishment on Wages

Stopping a garnishment, once the court has approved it, can be done, but your options are limited.

Steps to Stop Wage Garnishments

Negotiate: It never hurts to try and negotiate but it's probably to late once the collection agency has a legal garnishment. At this point they probably won't negotiate much of a discount given the expenses they have incurred and knowing you have a decent wage to collect from.

Bankruptcy: As mentioned, If the collection agency has already been approved a judgement you're options are limited. Bankruptcy will halt all collections with an Automatic Stay. Once you file your bankruptcy papers, legally all collections and garnishments stop. There is even a chance you can recover some or all of the money taken from your wages after your bankruptcy is approved.

Bankruptcy is a step people don't like to consider but with a garnishment hanging over your head bankruptcy could be your best choice.

Also, be prepared to hire a bankruptcy lawyer or a wage garnishment attorney. A complex case could require hiring an expert in each field. This will cost a bit more but is well worth the fees.

Collection Practices

There are occasions when even after filing bankruptcy, and you're under the courts protection, collection agencies will still try and collect.

Who's Breaking the Law?

If the collection agency continues trying to collect even after you file bankruptcy, then they are breaking the law.

The reason we mention this is there have been cases where the collection agency is sued; keeping good records is vital at this point.

Hiring a garnishment attorney is advisable and they will guide you through "what to do" if the collector still pursues their collection tactics. But we know for a fact that keeping good records is one thing your attorney will demand of you.

Garnishment is a collectors last resort and bankruptcy will be your last resort to trump the garnishment process.

The main thing is you now know what options you have in the garnishment process.

Remember you can only file chapter 7 bankruptcy every 8 years. If you used this wild card (chapter 7) before, and your not eligible yet, do everything possible to negotiate your debt so it won't end up as a garnishment.

You can also consider a chapter 13 bankruptcy. This type of bankruptcy won't be an immediate disillusion of debt, but if chapter 7 is not an option maybe chapter 13 will be your only choice.


    0 of 8192 characters used
    Post Comment

    • profile image

      Wage Garnishment 7 years ago

      Thank you for posting this article.

    • profile image

      Jon 8 years ago

      Contact an accountant to help you with a wage garnishment

    • profile image

      Sounds wonderful 8 years ago