5 Steps to Stop Garnishment of Wages

Garnishment of wages is only possible through specific debt collections. The most common type of debt paid through wage garnishment is an IRS tax lien, but wages may be garnished in order to cover state taxes, bankruptcy debts or child support. Wage garnishment can be financially and personally detrimental. You must be proactive to avoid the negative situation.

#1 Know your Rights

The Consumer Credit Protection Act, Title III, protects wage earners. If you are being threatened with wage garnishment, you should review the laws to make sure you know your rights. Most importantly, you cannot be fired if your wages are garnished. Some employers do not look favorably on employees facing this type of financial punishment, but they are not legally allowed to release you for this reason. Title III also limits the amount of wages that can be garnished in a given week. This amount is relatively small for IRS and state tax liens, but it is much larger for child support payments. You may have 50% of your wages garnished for this reason.

#2 Respond to Collections

If you have debt, whether to a private lender or the government, you should respond to attempts to collect. When you ignore collection attempts, you are telling the lender you do not anticipate making the payments. You do not have to pay all of your debt immediately, and you do not even have to cooperate with a collections agency. If you are contacted, simply respond with a request to verify the debt. Doing so will force the collections agency to stop attempts to collect until they have provided you with written verification, giving you time to deal with the situation. If you are in debt to a government agency, collections agencies will not call, the government itself will. In this situation, you will have fewer options.

#3 Establish Payment Plans

Even though your options may be limited, most lenders, including the government, want you to pay your debt instead of going into bankruptcy. This opens a window for you to negotiate a payment plan. The IRS will even consider a payment plan if you can show you do not have the funds to meet your current tax obligations. Especially in a bad economy, if you have lost your job or if you have suffered a fiscal emergency, you will find lenders hoping to work with you to avoid the problem of garnishment.

#4 Seek Credit Counseling and a Bankruptcy Lawyer

If you cannot negotiate with your lenders yourself, seek credit counseling. A counselor may be able to help you settle and consolidate debt to make it more manageable. If you cannot find a way to make your debt payments, entering legal bankruptcy will give you many protections. However, bankruptcy payments can be taken out of your wages, leading to garnishment. To avoid this, ensure you hire a bankruptcy lawyer that has the expertise to properly liquidate your assets and settle your over due debt according to seniority. Without an experienced lawyer, you may find the bankruptcy procedures quickly get out of hand.


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