Garnishment is a last-ditch effort at debt collection. This hits where it hurts because your money will be taken from you before you even get it and this will make dealing with your budget – or what’s left of your paycheck – very challenging.
If you are facing debt that can’t readily be paid, the best thing to do is contact your creditor and make some kind of payment arrangement and stick to it religiously. Otherwise, if debt goes unpaid and ignored, the courts issue a judgment on your creditor’s behalf requiring your employer to “garnish” or withhold a portion of your wages or bank accounts to pay back the debt.
A collection tool of last resort
“Garnishment is a legal remedy authorized by a court and should be considered a collection tool of last resort. In most states, the garnishment process can only be initiated by a court order and only if a judgment for monies owed has been entered.
This may cause you great embarrassment because your employer now becomes aware of your financial situation. Employers are typically required to tell workers about the withheld amount. While it is against the law for an employer to fire an employee whose wages are garnished, that protection goes away after a second and third such judgment.
Creditors are required, per state laws, to provide lead time to debtors of any pending legal action, and generally prefer to avoid the hassle of filing a lawsuit. But once the judgment has been rendered, your options are very limited,”
Credit card debt judgments and garnished wages
Once a credit card account (or any debt) goes into default, and the creditor decides it cannot collect, it may sell the debt to a debt collection company. If the credit card or debt collection company is unsuccessful in recovering the debt, then a lawsuit may be filed against the consumer in an attempt to recover its losses. If the ruling in the lawsuit goes against the consumer, a judgment may be issued to garnish property, bank accounts or wages.
You could contact an attorney immediately to discuss options before the situation escalates and you are faced with lawsuits and garnishment. Once the situation reaches this point, if it is a legitimate debt, the consumer’s only recourse is to either make a deal with the credit card company or to declare bankruptcy (which is an action you don’t want to take unless it is absolutely necessary). Otherwise, a judgment may result, followed by collection procedures.
Once a judgement has been rendered, all you can do is ask the court to adjust the amount of the garnishment if the reduction in pay severely impacts your ability to support yourself and any dependents. Also, if a judgment is rendered in a state where the garnishment law differs from federal law, the law requires the court to adjust the garnishment to the lesser amount.
When other assets, such as property, are attached, a lien is placed to the property for the judgment amount — or for as much of the judgment amount as can be secured — so that when a property is sold, the money obtained from the sale would be distributed first to the creditors, unless the debt is paid.
Don’t Let the Emotion Overwhelm You
When the notices start coming in, we can become emotionally overwhelmed and try to ignore everything. Don’t do this because with or without your participation, the lawsuit will go through and you will be faced with garnishment.
Be smart and will reach out for help before your financial situation gets out of hand.
Contact the creditor and try to make arrangements. Also contact a consumer credit counseling agency. A counseling agency may be able to negotiate lower payment arrangements with a creditor, but, once a debt becomes garnished neither you nor the counseling agency have any latitude because the payment arrangement is set by the court.