Friday, March 4, 2011

How to Protect Yourself From Wages Being Garnished From Your Check

A creditor must file a lawsuit against you and obtain a judgment and a writ of garnishment from a court in order to garnish your wages. Once the creditor obtains a judgment and if the state allows wage garnishments, getting a garnishment order is relatively easy since the creditor has already proved that you owe the debt. Legal institutions, such as the Internal Revenue Service and the United States Department of Education may garnish wages without a court order. You can take certain steps to stop your paycheck from getting garnished.



    Contact the creditor or the institution that you owe and set up a payment arrangement if you cannot pay off the debt at once. Debt collectors generally do not seek judgment or garnishment until after it has sent you payment notices, which you ignored, or after you have refused to honor an installment arrangement. Pay attention to the notices you receive and attempt negotiate a payment plan with the lender. If the lender has already sued you, the court notifies you of the lawsuit. The court papers include instructions on how to file a response to the suit. If you file an answer, present your case to judge at the hearing, such as your objections to the lawsuit or an explanation of why you haven't paid the debt.


    Offer the creditor or agency a settlement, which allows you to pay off the debt for less than you owe. For example, when considering an offer from a taxpayer, the California Franchise Tax Board looks at your ability to pay; your assets' equity; your current and future earnings and expenses; the probability of circumstances changing; and whether your offer will benefit the state.


    Claim hardship if the wage garnishment causes you financial hardship. In some states, when the court issues a wage garnishment, you are served with a copy of the garnishment. The court might allow you a certain time frame to pay the amount due before the garnishment is slated to begin. If you cannot afford the required wage withholding, contact the court for its procedure on filing a hardship claim. Take proof of your earnings and expenses with you to court. If the judge agrees with your claim, it can issue another garnishment for an affordable amount or temporarily set aside the garnishment.


    Challenge the garnishment if it's invalid in some way. For example, contact the issuing agency to report the matter if you were not served the proper papers; if the statute of limitations to collect on the debt and enforce it have expired and a judgment and a wage garnishment was still issued; or if the garnishment amount exceeds the federal or state limit. Under federal law, an employer can withhold no more than 25 percent of your weekly disposable income for an ordinary wage garnishment, such as one a creditor initiates.


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