How to Deal With Garnishments

Garnishment allows creditors or debt collectors to transfer money from a person's bank account for an unpaid debt -- or to demand regular deductions from the debtor's paycheck. Garnishment is possible after a court order by a judge. Banks, credit unions and employers are forced by law to comply with garnishment. Garnishment freezes bank accounts as the debt collector withdraws money in a lump sum or as it becomes available. During garnishment, the debtor may access the account only to make deposits. Garnishment requires employers to send a percentage of the employee's pay each pay period to the debt collector. Dealing with garnishment is a serious matter and may require help from an attorney.

Instructions

1

Identify the source of the garnishment by reviewing notices sent to you by a small claims court or your employer. For bank garnishment, contact the bank. Banks and employers will tell you who is responsible for the garnishment and offer a contact number.

2

Stop using the bank account with the garnishment if you're dealing only with bank garnishment. Redirect all your recurring direct deposits to a new bank account or prepaid debit card account. Bank garnishments are for a specific account, with debt collectors usually obtaining the account number from previous payments made by personal check. Moving to a different bank account or prepaid debit card account could allow you to escape the garnishment, at least for a while.

3

Visit small claims court in your county to confirm that the garnishment is valid. Ask for assistance from a court clerk to view records for the court judgment and garnishment order against you. Make copies for your records. Garnishment is possible only after a party filed and won a lawsuit against you, unless the party is a government entity, such as the Internal Revenue Service. The legal victory results in a judgment ordering you to pay a specific amount of cash, followed by garnishment in some cases.

4

Ask the clerk for paperwork available through the court for filing a "motion to vacate judgment" if you were unaware of the lawsuit or did not attend the court hearing. Failing to show results in an automatic default judgment, which is reversible by a motion to vacate. Vacating the judgment forces at least a temporary end to garnishment. File the motion with the court; a judge will respond to the request in writing. Ask a court clerk about typical waiting times for a response.

5

Call the debt collector holding the garnishment order if a motion to vacate the judgment is not an option. Make an offer to end the garnishment. Offer a lump-sum payment, if you can afford it, or promise regular monthly payments -- but don't offer to pay more than you can truly afford. Negotiate with the debt collector, but don't enter into a final agreement over the phone. If the debt collector is willing to offer a deal, ask him to send the details in writing, preferably by fax to speed up the process.

6

Consult with a consumer affairs attorney who also specializes in bankruptcy filings if the debt collector will not agree to end the garnishment. Give the attorney all pertinent information about the garnishment, including any correspondence from the debt collector. The attorney can advise you about legal options. For example, the state of New York has laws preventing bank garnishment if less than $1,750 is in the account. Also, federal laws prohibit garnishment on certain types of income, such as pension payments and Social Security benefits.

7

Direct the attorney to send the debt collector a letter indicating that you will file for bankruptcy if the debt collector does not end the garnishment and accept a settlement. Bankruptcy ends garnishment immediately and, depending on the type of bankruptcy, the debt collector may receive nothing.

8

File for bankruptcy with the help of the attorney if all other efforts to end the garnishment fail and you cannot pay your bills or cover your living expenses as a result.