Stop Wages Being Garnished By Creditors
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How to stop wage garnishment

You've been to court. The Judge awarded victory to the creditor. Now you find yourself in the unenviable position of having your paycheck garnished. Now what? You don't like the idea of having creditors take all of your money from your paycheck before you've had a chance to buy groceries. Not everyone who gets a judgment issued against them deals with it the same way. Believe it or not, you still have options.

The most unattractive option is to simply wait it out. Yes, allow the garnishment to happen. This doesn't stop it from happening, of course. However, eventually, you'll pay off the judgment and the garnishment will end.

Pay Off The Judgment in Full

You can stop a wage garnishment by paying off the judgment in full. This isn't as hard as it sounds. You can raise money by tapping into your whole life, universal life, or variable life insurance policies, retirement accounts, or sell off stuff you no longer need. Raising money quickly is the key. It's best to pay off the judgment before garnishment begins.

Contact your creditor directly, with a check in hand, and ask where to send the money. Then, ask for an immediate termination on your garnishment. Most likely, the creditor will agree to this since it gets the money in their hands faster than having to wait for payments spread out over the life of the garnishment. Be sure to get everything in writing before making a commitment to pay.

Work Out A Payment Arrangement Quickly

If you can make an alternate payment arrangement with your creditor that is somehow more favorable than the garnishment, the creditor might take it. This one is going to be hard to pull off though. You see, with a garnishment, the creditor is guaranteed the money. They now have direct access to your paycheck. There has to be some kind of overriding benefit - like an early payoff for example - for the creditor to even consider it.

For example, let's say you offer to pay the creditor in four equal installments over the course of four months, instead of garnishing your check for 52 weeks. Let's also assume you have something to put up as collateral. If you fail to pay, the creditor has legal rights to take the collateral. Under this kind of arrangement, the creditor might just see this as a better deal. The company gets its money more quickly, and you get out from under the garnishment.

Use Bankruptcy As Leverage

When all else fails, you can threaten with bankruptcy. Chapter 7 bankruptcy means that all of your debts are discharged. This is really only an option when you really have no other way out and you can't afford the garnishment. Most times, the court has already figured out the maximum amount you can afford but, in the rare instance when the court is wrong, you can use bankruptcy as an effective way to terminate a wage garnishment.

A few things about bankruptcy:

  • It's not guaranteed. You might end up filing for Chapter 7 only to find out that you don't qualify for debt relief. If this happens, you might qualify for Chapter 13 but Chapter 13 still requires that you repay all of your debts - it just reorganizes the debt.
  • If you mess up, you could end up owing your creditor anyway. If you fail to secure a Chapter 7 bankruptcy, you'll end up owing your creditor anyway. You'll send your credit score further into the abyss and you won't have accomplished much in the process.
  • Until your debts are discharged, the garnishment will continue. Garnishments continue until the court issues the debt relief. That means you need to wait until the process is over, and your debts are fully discharged, before the garnishment ends. Bankruptcy can be a length process because;
  • You have to enroll in credit counseling and debtor education. It's not a simple matter of filing and going to court. You have to enroll in credit counseling courses, and debtor education courses. These courses are required prior to any discharge. Usually, there is a fee and a certificate that goes along with each course.

Regardless of the path you choose, remember that garnishments are legally binding by the court. It's difficult to impossible to remove them, and your best bet is to seek the advice of a lawyer or credit counselor to assess your personal financial situation.