Wage garnishment is one of the legal reliefs available to creditors to collect monies owed to them by debtors. The creditor can file suit against a debtor to recover the money owed. Based on the facts and evidence submitted in such suits, the courts can issue a writ of wage garnishment to the employer of the debtor to withhold a certain fixed sum of money each month from the pay due to the debtor and deposit this money as per directions issued in the writ.
If your wages are being garnished, here are some ways in which you can stop the process - while still following the law.
Avoid getting sued -- For many creditors, resorting to filing a suit is a method to use after all other methods to collect a debt have failed. If you owe money, do not ignore or avoid the creditor when you are unable to pay. It is better to get in touch, discuss your current problems and the reason you are unable to pay, work out a new repayment or debt settlement plan, and keep them informed as and when your financial situation changes for the better or worse.
Appealing against wage garnishments -- While a writ of wage garnishment cannot be reversed, you can file an appeal in the appropriate court with a "claim of exemption." Courts are cognizant of the fact that everyone has a right to fulfill their basic living needs; if your pay are being garnished excessively and you are unable to meet your basic needs such as housing, food and health care, then filing a claim of exemption will help you. Filing forms will be available with the court that issued the original writ. Once your claim is filed, the court will set a date for the hearing. Attend hearings with all documentary proof of your sources of income, costs of housing, food, health care, transport, education, etc. You should be able to convince the court that the loss of pay is preventing you from getting the basic necessities of life. Once the court is convinced, it can issue a judgment setting aside the original writ, preventing the creditor from further garnishing your wage, or issue a new writ for a smaller amount, leaving you enough money to meet basic needs.
Paying off the judgment amount -- Once a writ of garnishment is issued, you can arrange to have the debt amount paid off in full within 10 days of the judgment being passed. In such instances, the writ becomes invalid once you submit documentary proof of having satisfied the judgment amount in full.
Declare bankruptcy -- Individuals can avail themselves of two types of personal bankruptcy - Chapter 7 and Chapter 13. The chapter numbers refer to the specific portions of the bankruptcy code where the process, rights and remedies are covered. Once you file, all your creditors will be required to stop all collection proceedings and attempts against you. This includes even legal proceedings such as wage garnishments. Bankruptcy proceedings differ from state to state; hence, it is advisable for you to find out the exact procedures that are applicable in the state in which you reside.
- Chapter 7 -- In this case, all property of the debtor, barring a few exceptions, is completely liquidated and used to settle all debts owed. This helps the debtor make a fresh start.
- Chapter 13 -- This involves a repayment plan spread over five years, wherein all debts and consolidated, no interest is added or accrued and the debtor gets to repay all unsecured and secured debts other than the principal mortgage on the property where the he or she resides. The advantage is that the monthly repayments made under a Chapter 13 plan will probably be less than the sum of individual payments, and the repayment period gets extended.
Of all the methods described above, the first and last methods (specifically Chapter 13) are the best ways to stop wage garnishment. It is important to remember that not all garnishments are for collecting outstanding debts. They are, more often than not, used to satisfy tax, child or spousal support, money owed in penalties for the commitment of a crime or the repayment of federally guaranteed loans. In such cases, the methods listed above may not work and it will be better to approach the concerned authorities or agencies for resolution.
Please consider hiring a wage garnishment lawyer, who will be able to fully explain relevant laws, your rights, and will help you form a strategy.