A garnishment occurs when someone to whom you owe money legally takes part of your wages as a means of collecting on the debt. This can result from unpaid federal or state taxes, child support, student loans and credit card debt. A garnishment is a legal remedy for collection and in many states can only be mandated by a court order.
When your wages are garnished, your employer is instructed to withhold a certain amount of money from your paycheck until the collections debt is settled. This is an unfortunate situation for many reasons, one being that now your employer is aware that your credit is in serious trouble.
Obviously though, the greatest impact is on your ability to provide for yourself and your family is diminished while every paycheck is reduced by the garnishment until the debt is settled. In addition to the stress of having your wages garnished, you now have to struggle just to pay for gas, food and utilities.
Though the creditors are within their legal rights to hit your paycheck in a last-ditch collection attempt, it certainly does not seem fair. If you couldn’t pay your bills to start with, how is this going to help? Clearly it’s not.
But there are things you can do to avoid a garnishment in the first place. As soon as you’re aware that you are getting in trouble with your creditors, your best course is to be proactive and contact them immediately. In most cases a creditor would rather work with you to pay down the debt than turn the debt over for collection.
Additionally, when you are served with a judgment on an old debt, by law the debtor has to give you a time frame in which to respond. Don’t let this period pass without responding or being otherwise proactive. Once the judgment is final, there is little that can be done to remedy the situation.