What will a collection company do to get the money they feel they are owed?
More than half of U.S. states will allow a creditor with a judgement to take 25% of someone’s paycheck. When a person is finally getting on their feet and able to start to pay their bills, suddenly a quarter of their paycheck, each and every paycheck, is gone to pay an old debt.
What’s especially troubling about wage garnishment is it follows a court judgement that the debtor owes all the money the credit company is seeking. Often that is not true.
People being sued for debt often ignore their court notices and let the case against them go into default judgement. At that point, fighting or disputing the amount of debt owed is much more difficult.
This is a pretty scary way to get money from people who arrange their rent and other payments based on what they expect from their paycheck.
“Garnishment is a legal remedy authorized by a court and should be considered a collection tool of last resort. In most states, the garnishment process can only be initiated by a court order and only if a judgment for monies owed has been entered,” says David Cherner, the former legal and legislative director of state government affairs for ACA International, The Association of Credit and Collection Professionals.
“Clients are often embarrassed when faced with garnishment because now their paycheck is involved, which means their employer is aware of their financial situation,” says Gail Cunningham, senior director of public relations at the National Foundation for Credit Counseling (NFCC). Employers are typically required to tell workers about the withheld amount.
Learning to work with creditors is usually the best way to avoid wage garnishment. Use tools like communication, a repayment plan, and doing what you promised.
Todd Ossenfort, CEO of Pioneer Credit Counseling in Rapid City, S.D., and online financial Q&A writer “The Credit Guy,” says creditors sometimes will hold off on suing and garnishing if the debtor participates in a debt-management plan (DMP) through a credit counseling agency. Participants in a DMP make one payment to a credit counseling agency each month; the agency then distributes payments to creditors on the plan. In some cases, the agency can negotiate a reduced payment, interest, and fees on the debt.
Then there’s resorting to legal help.
If you have a problem with wage garnishment, debt relief, debt settlement, phone Axsmith Law LLC at (202) 285-5415.