Wage garnishment is one of the most powerful tools creditors can use to collect past-due debts. It requires a court order, usually following a lawsuit against the debtor. Once the creditor gets a writ of garnishment, the debtor's employer must withhold part of the employee's paycheck each pay period to pay off the debt. However, debtors can still take action to resolve the debt in another manner after a creditor garnishees wages.
Settlement With Creditor
While it is best to make payment arrangements with your creditor before getting to the point where he garnishees your wages, many creditors are willing to make arrangements even after garnishment. Contact your creditor and explain that you would like to settle your account and stop the garnishment. You may wish to hire an attorney to help you negotiate with the creditor so you can get a fair settlement and end the garnishment.
Claim of Exemption
If you cannot afford the wage garnishment, you can file a claim of exemption with the court. This claim is an argument that you make too little money to support the wage garnishment. When you go to court, you must bring proof of your income and necessary expenses. Pay stubs are sufficient to prove your income level; you must bring bills and food receipts as proof of monthly living expenses.
Filing for Bankruptcy
If you file for either Chapter 7 or Chapter 13 bankruptcy, the court issues an automatic stay to your creditors. This means that your creditors cannot take collection action against you while the bankruptcy is being processed, including garnisheeing your wages. Your creditors have the right to go to court to ask it to lift the stay so they can resume garnisheeing your wages or other collection activities. You may have to pay the debt back after the bankruptcy is settled if you file for Chapter 13 or if your creditor succeeds in getting relief from the stay.
Debt Settlement
Debt settlement companies negotiate with all of your creditors so you can resolve the debt by paying a portion of it. You pay a fee to the debt settlement company for negotiation. After the debts are settled, you make monthly payments to the debt settlement company, and it distributes them to your creditors until all your debts are settled. Debt settlement companies can include creditors that are garnisheeing your wages. Once companies enter a debt settlement agreement, they must stop garnishment.
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