When you fall into debt there are many ways creditors can try to claim their money. Creditors often bombard debtors with harassing phone calls, threatening letters and negative hits to their credit report. But did you know that creditors have a legal right to claim your paycheck before you see a dime of it?
It’s your money, keep it that way
Wage garnishment refers to the process of creditors seizing your paycheck in order to satisfy a debt. Often, this process is a last resort options taken by creditors and is usually reserved for specific types of defaulted payments such as back due child support or alimony payments, defaulted student loans and back taxes. A court may order your wages to be garnished after creditors can prove they provided the debtor with ample time and resolution attempts to repay the debt. However, there are steps you can take to avoid having your wages garnished. If you receive a collection letter, contact the creditor and try to negotiate a repayment plan for your debt. Some creditors are willing to agree to terms different than those originally set forth in the initial credit agreement. However, if you receive a letter threatening legal action, it is best to contact an attorney to discuss your credit troubles and options for resolving your debt.