A wage garnishment is an order to withhold a percentage of your pay that a creditor or a government agency sends to your employer. Most creditors have to obtain a judgment to garnish your wages. State and federal agencies may not need to seek a judgment. For instance, the Department of Education can issue an administrative wage garnishment for defaulted federal student loans. The amount taken from your wages depends on your individual circumstances and the type of debt involved.
You may have several options to resolve a wage garnishment. These options include:
- Objecting to the garnishment: You could try objecting to the wage garnishment. For instance, you could argue the creditor is taking too much money from your paycheck. Creditors cannot take more than a specific percentage of your income. You may also be able to object if the creditor did not give you warning of the garnishment or if they ignored other required procedures. An attorney could help with any additional steps after filing the objection.
- Loan consolidation or rehabilitation: You could complete the Department of Education’s loan rehabilitation program to stop a wage garnishment for federal student loans. In addition, you may be able to combine your defaulted student loans into a Direct Consolidation Loan. Both options could bring your loans back into good standing.
- Negotiate a payment plan: The creditor may be willing to negotiate terms for a revised payment plan before securing a judgment. You may be able to negotiate for a lump sum payment of less than what was owed.
- File for bankruptcy: You may be able to stop a wage garnishment by filing for bankruptcy. The automatic stay that is issued during your case could prevent creditors from garnishing your wages. However, the automatic stay cannot stop wage garnishments for certain types of debts. You could discuss your wage garnishment with a bankruptcy attorney to discover how the automatic stay would apply to your situation.
Questions About Stopping a Wage Garnishment? Call Our Kansas City Bankruptcy Attorneys
A wage garnishment could put your finances into a downward spiral. Depending on your financial situation, a wage garnishment could cause you to default on other debts. You should always seek to resolve a wage garnishment as soon as possible.
The Kansas City bankruptcy attorneys at The Sader Law Firm could help you determine which options would work best for resolving a wage garnishment and other difficult financial problems.