Can I Settle a Wage Garnishment Before it Goes to My Employer?

Having your wages garnished by a creditor not only reduces your income, but it can be a source of significant embarrassment. If you don't want your boss to learn about your financial problems, try and work things out with your creditor before the wage garnishment process begins.

Wage Garnishments

In a wage garnishment, your creditor sends legal papers over to your employer requesting that it withhold money from your paychecks in order to pay off your debt. When a creditor garnishes your wages, not only do you lose part of your income, but your employer gets drawn into managing your personal finances.

Negotiate With Your Creditor

Try to convince your creditor that it doesn't have to garnish your wages in order to get its money. If you can pay off the debt now, do so. If you can't pay the debt now but believe you can do so over time, offer to set up a payment arrangement outside of wage garnishment: Some creditors may be willing to bill your credit card or electronically withdraw funds from your checking account each month rather than demanding that your payments come directly from your paychecks.

Employment Rights

While your employer probably won't be happy about initiating a wage garnishment, federal law protects you against losing your job because of a garnishment resulting from one debt. If your finances are particularly bad, however, and there is a risk that you may face garnishment from more than one creditor, federal law no longer protects your job.

File for Bankruptcy

If you need to avoid wage garnishment at all costs, look into filing for bankruptcy. Bankruptcy's "automatic stay" protects you against wage garnishment as well as other collection efforts. While this is a drastic step that can have serious repercussions for your finances over a long period of time, it may be the only way to protect your job if you have more than one judgment creditor. Speak to a reputable bankruptcy attorney about this option and ask for information about alternatives. Your lawyer may be able to intervene on your behalf and get your creditor to back off a wage garnishment threat in exchange for a settlement or a payment agreement.