Are Your Wages in Danger of Being Garnished? Here’s What to Do
1.Respond to the Creditor’s Demand Letter
In many states, the requirement when a creditor has obtained a judgment against you is that they send you one final warning prior to the commencement of the garnishment. This is generally referred to as a “demand letter”. It is not advisable that you ignore a demand letter sent by your creditor. It is usually the preference of the creditors that they receive voluntary payments from debtors, as opposed to having to prepare the paperwork associated with garnishments which are both costly and time-consuming.
2. Get Debt Counseling
You may be able to avoid a garnishment, which could ultimately lead to bankruptcy, through the assistance of a consumer credit counseling service (CCS). A CCS is a non-profit agency that should not be mistaken for debt repair companies. The agency can assist you in the negotiation of an agreement with your creditors on a payment plan. If an agreement is reached with your creditors regarding this group payment plan, they will not be able to garnish you once regular payments are being made.
3. Object to the Garnishment
If you neglect to do anything after you are in receipt of the demand letter, then more than likely you will receive copies of the garnishment order and notice of the wage garnishment from your employer.
Any objections you may have to the garnishment should then be filed with the court and a hearing date requested. Forms to be completed in order to request a hearing may be included in the garnishment papers, but if they are not, you will have to file this separately.
Some of the objections that you can make which are more common include:
The Creditor is Taking Too Much Money
Your creditor according to federal law is only able to garnish less than 20% of your disposable earnings, which is your gross pay less any taxes or mandatory deductions. They could as another option garnish your disposable earnings less the equivalent of 30 times the established federal minimum wage.
If you happen to be garnished for child support or alimony, as much as 50% or 60% of your disposable earnings are subject to garnishment. Different computations are used in the case of garnishment for IRS taxes or student loans. If any of this sounds confusing or if you have any questions regarding it, contact our Gwinnett County bankruptcy lawyer, Keith Cornwell.
In the event that the amount of money that is to garnished from your wages, exceeds the allowance by federal and state law, this is grounds for you to make an immediate objection to the garnishment.
The Creditor Did Not Follow Proper Procedures
If the garnishment procedure is not adhered to, termination of the garnishment can be ordered by the court. Improper garnishment could be an instance where the creditor has failed to give adequate notice of the garnishment.
The Creditor Was Paid
If full or partial payment was already received by the creditor through other means such as prior post-judgment voluntary payments, bank attachments, and other means, then you are entitled to object. This will prevent the creditor from receiving in excess of their legal entitlement.
Attend the Objection (and Negotiate if Necessary)
You should make every effort to attend the hearing after you have filed your objection, as the court may overrule your objection if you do not attend, and this will result in the commencement of the garnishment.
If you attend the hearing and the court denies your objection, you still have the opportunity to meet with the creditor with the aim of negotiating a payment plan. If you are successful in getting the creditor to agree to this plan, it may still be possible to stop the garnishment.
Challenge the Underlying Judgment
If you were not properly served with the complaint and the resulting legal documentation, then you have legal grounds on which to dispute the judgment. There still may be an opportunity to stop the garnishment. You will not be allowed to dispute the judgment at the hearing, so any objections will not fall on receptive ears, but you may be able to vacate the judgment. This would be done by filing a separate motion, usually the posting of a bond or attending another hearing. You may require the assistance of a local attorney as this process can be quite difficult. You must pursue this option quickly, as there is a limited period of time during which this can be accomplished.
Negotiation of a resolution with the creditor is still possible after the garnishment has commenced, especially if there is a change in your circumstances. You may have received your income tax refund and can use this to reduce the judgment, and then afterward discuss with the creditor the possibility of canceling the garnishment, in exchange for settling the debt with a lump sum payment.