There are many unpleasant consequences to owing a significant amount of debt, including receiving calls from debt collectors. Another way creditors collect on past-due balances is through the wage garnishment process. This involves the employer taking money directly out of your paycheck and sending it to the creditor to go toward the repayment of your debt.
If you received notice that your employer will begin garnishing a portion of your wages, you may feel hopeless and unsure of what to do next. How can you get ahead or keep up with your payments if you aren’t receiving all of your paycheck? Thankfully, there are steps you can take that will allow you to regain your financial footing and make wage garnishment stop.
How does it work?
A creditor cannot simply ask your employer to withhold a portion of your wages. They must seek a court order that will then go to your employer with instructions. There are also limits to how much your employer can withhold from your paycheck. The following may help you understand how wage garnishment works and what you can do to regain control:
- Wage garnishment will continue until you pay the debt or until you file for bankruptcy, which enacts the automatic stay.
- You must receive notice of the garnishment in enough time to dispute it if you choose to do so.
- Social Security, veteran benefits and other forms of income are exempt from the wage garnishment process.
- Your employer cannot fire you for one wage garnishment but may fire you if there are multiple garnishments against you.
If you find yourself in this situation, one of the most practical things you can do is file for bankruptcy. This will halt all creditor contact, as well as stop any current collection processes against you. This includes wage garnishment.
A better tomorrow
Filing for bankruptcy may not seem like a desirable step. There are many misconceptions about bankruptcy, but it can provide you with the opportunity to seek a better and stronger financial future. Bankruptcy allows you the opportunity to deal with certain types of debt once and for all, and you can emerge from this process with a more manageable situation.
If you received notice of your employer initiating the wage garnishment process, you may benefit from learning more about the potential benefits of bankruptcy. It is in your interests to know all of the options in order to make the best choices for your individual situation.