What is wage garnishment? Wage garnishment is when a creditor or debt collector takes payment from a debtor directly from their paycheck or bank account. Several U.S. states have different garnishment exemptions from debt collection that protect debtors. For more information on garnishment exemptions in your state, choose a state from our list of US states that Prestige Services, Inc., covers.

How Does Wage Garnishment Work?

There generally are two types of garnishments: 1) a wage garnishment where creditors can legally acquire part of a debtor’s earnings from their employer; and 2) a nonwage garnishment, which creditors can tap into a debtor’s bank account for payment (NerdWallet.com). In order to get garnishment rights, most creditors must sue you in court and either win the case or get a default judgment from a debtor not responding to the lawsuit (Nolo.com).

Upon obtaining court judgment to garnish your wages, a creditor will send documentation to your employer directing them to take a certain amount from your wages and send that money directly to the creditor. Creditors can continue to garnish a debtor’s wages until they pay the debt in full or stop the garnishment (Nolo.com). Many states have collection laws that forbit collection agencies and creditors from contacting a debtor’s employer about their employee’s debt. If awarded a judgment in court, collection agencies and creditors can bypass those laws to obtain money from a debtor’s wages.

How Do You Avoid Wage Garnishment?

If you’re one to ignore debt and a debt collector’s advances, this is your chance to learn from your mistake. All debtor’s must be legally notified of a garnishment or debt lawsuit. If provided this notice, a debtor can challenge or file a dispute if they don’t think they owe debt, or if the notice has inaccurate information. (NerdWallet.com)

If a debtor can’t avoid a garnishment judgment, they can work out a deal with the court/creditor, challenge the judgment, or accept the garnishment. If they choose to work out a deal, a debtor needs to communicate directly with a creditor to work out a payment plan. Judgment challenges can be a more tough route to take, mostly due to the short time allowed to contest a ruling (NerdWallet.com).

Sources

NerdWallet.com: https://www.nerdwallet.com/blog/finance/wage-garnishment/
Nolo.com: http://www.nolo.com/legal-encyclopedia/using-exemptions-protect-your-wages-from-garnishment.html