When a creditor or a legal institution, such as the Internal Revenue Service, garnishes your salary, your employer is required to withhold a specific portion of your income each pay period until the issuing agency releases the garnishment. Though it can be hard to stop a garnishment once it has begun, there are ways to do so.
Payment Arrangement
Before garnishing your paycheck, the debt collector sends you notices requiring you to pay the debt, or at least contact you to make some type of arrangement to pay off the debt. If you pay attention to the notices, you can stop your salary from being garnished. Contact the debt collector, and inquire about an affordable payment plan if you cannot pay off the debt in a lump-sum payment. The collector would prefer to work with you rather than going through the legal process of a garnishment.
Appeal
Only a legal entity, such as the IRS, the United States Department of Education or the state taxation agency, can garnish without a court order. Anyone else must file a lawsuit, obtain a judgment and apply for a wage garnishment with the court in order to garnish your salary. When a creditor files a lawsuit, the court serves you with papers, which includes instructions on how to file an answer to suit. If you file an answer, the court schedules a hearing for you to tell your side to the judge. You can discuss why you haven't paid the debt or any objections you have toward it at the hearing. Legal institutions also send you a notice of their intent to garnish or levy your salary, which include instructions on how you can prevent it, such as by filing an appeal with the agency within the time frame specified in your notice.
Claim Hardship
If a wage garnishment is causing you -- or will result in you facing -- financial difficulties, contact the issuing agency for its procedures on filing a hardship claim. For example, you can contact the issuing court for its procedures on filing a claim of exemption, or for an IRS wage levy, complete Form 433-F and include your income and expenses. Federal law allows your employer to withhold up to 25 percent of your weekly disposable income for a wage garnishment.
Settlement
If you cannot pay off the debt in a single payment, contact the debt collector to see if it will accept a settlement, which allows you to pay off the debt for less than you owe. The collector will likely agree to it if it's in the agency's best interest. The agency might also consider your ability to pay, your assets, and current and future income and expenses before agreeing to a settlement.
Considerations
In some cases, you can challenge a wage garnishment. For example, if the statute of limitations to collect on the debt or enforce it has expired or if you were not served the appropriate papers, you can contact the court or issuing agency to dispute the garnishment. Filing bankruptcy is another way to stop wage garnishments, but keep in mind that it can stay on your credit for up to 10 years.
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