Can My Wages Be Garnished To Settle A Debt That I Owe?
Do you have a judgment on your past due accounts and wonder if creditors can garnish your wages? The quick answer is YES.
Can Creditors Garnish Wages?
Wage Garnishment and Bank Levy are two commonly used and powerful collection tools. Once a creditor (debt collector) has a judgment, they can take steps they consider necessary and appropriate to collect on that judgment.
Wage garnishment occurs when a creditor gets the judgment and notifies your employer, ideally through the local sheriff.
They may approach the sheriff’s department with a valid judgment order called an “Earnings Withholding Order.”
To settle this debt, your employer must deduct up to 25% of the net income on every paycheck. The funds are sent from the employer to the sheriff’s department and finally to the creditor.
Can I Challenge a Garnishment?
Indeed, you have the right to contest a garnishment in these four ways:
- Pay the debt
- Allow wage garnishment to settle the debt
- File a claim of exemption with the court, proving you cannot afford to pay 25% of your take-home salary
- File bankruptcy
However, if the creditor enacts a bank levy order against you, it freezes your financial account, and the creditor can withdraw all money from it to cover the debt. You could have your rent or mortgage payment in that account, but a levy will take all that money until the debt is paid in full.
It is hard to say which is worse in individual cases – garnishment or levy – but both are stressful and what’s even destructive is when all your money is taken out immediately.
If you are in a similar situation, get legal help. Call us to determine your rights and navigate these testing times.