If you are significantly in debt and creditors have been calling, you know the pressures of repayment all too well. Many people that cannot afford to repay their debts ignore the situation, which only leaves them in worse shape than before. The biggest mistake you can make as a debtor is failing to take action. Even if you are having a hard time repaying your debts, failing to contact your lenders could result in serious consequences like wage garnishment.
Keeping Your Money Out Of Their Hands
In order to garnish your wages your creditor must sue you and obtain a court judgment. Once the order is obtained the creditor can garnish up to 25% of your net wages by requiring your employer to pay them their percentage before you are given your check. However, if the garnishment is ordered to collect on back due child support or taxes up to 50% of your wages can be garnished to satisfy these payments.
The good news is that you have several options to protect your wages. The best way to keep your wages from being garnished is by repaying your debts. If you cannot afford to repay your debts by the terms of the creditor, contact them to explain your financial situation. In many cases, you may be able to obtain a negotiated repayment arrangement that better suits your budget. If you are unable to negotiate a repayment deal or your financial hardships are too severe, bankruptcy can provide immediate protection against wage garnishment. Once you enter bankruptcy, the garnishment order is no longer valid and creditors must adhere to the order set forth by the bankruptcy court.