AARGH! My Wages Are Being Garnished! What Can I Do?
There are few feelings worse than suddenly hearing from your HR department that your wages are going to be garnished. Don’t panic! Here’s what to do.
Call your lawyer – Yes, this is self-serving, but we do this all day long. There’s nothing in this list that’s a secret. It’s just that we’re faster and better at it. However, you can do all this yourself.
Call the Creditor – You have nothing to lose by trying to have a conversation with the creditor and working out an arrangement to pay the debt back. If the creditor is open to setting up a payment plan, then you may be able to avoid having your wages garnished. The bad news is, this is rarely successful. Some creditors who are understanding may be willing to work with you, but if you had been paying in the first place, they wouldn’t need to garnish, so often they believe they’re in better position by continuing your garnishment Creditors are for the most part not open to discussing payment arrangements once they have a garnishment order in place. However, it’s worth a shot, no?
File an Exemption – In California you might possibly be able to stop the Wage Garnishment by filing an exemption. You may be able to have the wage garnishment stop or cut back the amount being garnished if you can show the money is necessary to support you or your family. If you can show the cash is required to make provision for the basic essentials of life then you might be able to stop the garnishment. There are a few steps you want to take to stop the garnishment thru registering a claim of exemptions in California.
First you need to:
File a Claim of Exemptions Form. Then,
Fill out a Financial Statement.
You must include a financial statement with your Claim of Exemptions. The financial statement details your income and your expenses.
Be sure to only use the official exemption and financial statement forms approved by the California Judicial Council, which are the same ones I linked above.
You can offer to pay the creditor a certain amount as part of your Claim of Exemptions. If the creditor does not oppose it then you may be in a position to avoid garnishment and repay the creditor. If the creditor opposes your Claim of Exemptions then a hearing will be held in which you will have to prove that garnishing your wages will result in you not being able to provide for you or your families support. At this hearing the judge will decide whether withholding 25% is to much and how much should be withheld from your paycheck.
File for Bankruptcy – You can stop the wage garnishment from proceeding by filing for bankruptcy in California. Most people may see this as a last resort but, honestly, bankruptcy is often a better option.
When you file for bankruptcy an ‘automatic stay’ is immediately put into place which stops your garnishment, or any collection action from any creditor, from continuing. Once we file your bankruptcy petition, the sheriff’s office will be informed of your filing and they will issue a release to your employer, which will stop the garnishment.
Depending on your circumstances, filing for bankruptcy to stop your wage garnishment may be your best option. It’s hard to say for certain without spending half an hour analyzing your situation with your bankruptcy attorney (ahem… me). If you have a wage garnishment in place then it’s pretty certain your credit is in bad shape already, and filing for bankruptcy isn’t going to make much difference.
if you know that you absolutely cannot afford to pay this debt, then you are simply posponing the inevitable. Eventually you will have to file and get rid of the debt via bankruptcy. The sooner you file for bankruptcy the sooner you can start rebuilding your credit. Most people who file for bankruptcy can improve their credit to a good level after 2 to 3 years from filing.
There are other options you can also seek to stop wage garnishment such as fighting the judgment obtained based on improper service. If the creditor improperly served you you may be able to temporarily halt the garnishment. Many times these methods are just delaying the inevitable since the creditor will more than likely correct what error was made and proceed with obtaining a judgment against you and garnishing your wages.