Millions of Americans who have suffered a job loss are at risk of a future wage garnishment . Many debtors mistakenly handle the prospect of a wage garnishment by ignoring creditor calls and letters; but that’s a serious mistake. Here are a few tips for stopping (or at least delaying) a wage garnishment:
Despite popular opinion, a wage garnishment does not start with a judgment granted to a creditor. The road to wage garnishment begins with your first missed payment. For those facing a job loss, this is difficult reality to face. But the truth is that if you cannot pay your debts you are already at risk for a wage garnishment. So the first step is to contact your creditor before you miss that first payment. Contact them via phone and via letter. Let them know what your situation is and ask for a “forbearance.” Receiving forbearance from a credit card company is difficult; but it is worth a try. Other creditors such as a vehicle finance company or mortgage lender may be a little more flexible than a credit card company. The important thing is to communicate your situation and ask for the forbearance, it may not be offered automatically.
Respond to creditor calls and letters. Yes, we know this is default to do, but it is necessary. A creditor may move faster towards a lawsuit and eventually a wage garnishment if you are nonresponsive to their calls and letters.
Challenge any inaccuracies. While most credit card statements may be correct, sometimes there are errors. You have the right to challenge any errors in billing and the creditor is required to respond to your concerns. They must address your concerns in a timely fashion. This may delay their ability to file a lawsuit and wage garnishment.
Respond to any lawsuits filed by creditors. If you fail to respond to a creditor’s lawsuit, they may be granted a default judgment which will allow them to begin a wage garnishment. Even if you do respond, it may not stop the wage garnishment, but it can buy you some time.
Do an honest assessment of your financial situation. Do you have money to pay your debts (at least the minimum)? If not, you may not be able to avoid a wage garnishment without filing for bankruptcy.
Consider your bankruptcy options. Chapter 7 bankruptcy and Chapter 13 bankruptcy will both stop wage garnishment in their tracks and you may be able to discharge your debts or repay them under more reasonable terms.
