How to make a payment arrangement to stop wage garnishment

A wage garnishment is a legal request from a creditor to take money directly from your paycheck before they pay you. If you owe taxes or fall behind on your federal student loans, the government can make such a request without a court order. All other creditors must obtain a judgment in a court of law before they can legally order that your wages be withdrawn to pay off a debt.

The good news is that you will generally receive notice first, and depending on the date your employer calls to request payroll (known as the “payroll deadline”), you will have a limited time to take action that could be stopped. . your salary to be taken. The amount of your wages that can be taken also depends on who is garnishing. The IRS can take up to 50% of your wages to pay back taxes, so a wage garnishment will hurt you financially if you don’t take steps to stop it. The amount that creditors can take ranges from 15% to 50%.

The easiest way to avoid a wage garnishment is to make a payment arrangement with the creditor right away and start making payments. Unfortunately, this invaluable information is only useful when you have the money to pay for them. If you don’t have the money to pay them, your next best alternative to stopping the wage garnishment is to file for bankruptcy protection.

You see, filing a bankruptcy case results in what’s called Automatic Stay, which is a court order to stop all collections against the person seeking bankruptcy protection, including foreclosures and wage garnishments. This makes it a powerful tool against aggressive debt collectors who have gone to the trouble of suing you, obtaining a judgment, and exercising their legal debt collection efforts by finding your employer and requesting to be paid with your paycheck. .

Depending on your income and financial situation, you can file for bankruptcy settlement under Chapter 7 of the Bankruptcy Code, in which you stop the garnishment without making a single payment on the debt. Otherwise, if your income is above average for your household size (using the IRS median family income standards) or, if you have assets to protect, such as your home equity, you can propose a plan for payment according to Chapter 13 of the Code.

Whichever direction you choose to take, you must act fast or the embargo will follow through. It is important to consult with an attorney to explore all of your options for getting out of debt and a bankruptcy case is worth exploring because it is a powerful tool that puts you back in control of your paycheck and gives you breathing space to recover. financially. Get rid of debt and move quickly toward your financial goals. Most attorneys provide free consultations, so take advantage of their advice even if you don’t hire them. We have helped hundreds of families avoid wage garnishments. Please let us know if we can help you too.