Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Jan 29, 2020

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Wage garnishment is extremely unpleasant. If a wage garnishment action is brought against you, this means a creditor has gone to court and proved to the court that you aren’t paying back your debt. Not only does this show up as a judgment on your credit report, but a notice will also be sent to your employer that he must start taking money out of your paycheck and sending it to your creditor. While you can’t be fired for a single wage garnishment, it is embarrassing for your boss to know you have financial problems- not to mention the fact that money will start disappearing from your paycheck before you even see it. Fortunately, you do have alternatives to wage garnishment if you are proactive and take the right steps.

Ways to Avoid Wage Garnishment

The best way to protect yourself from wage garnishment is to begin communicating with creditors as soon as you realize you can’t pay the bills. When you talk to your creditors or begin to come up with a plan to avoid wage garnishment, you have three major options:

  • Try to settle the debt for less than the full amount owed. For example, if you owe $1000 on a credit card, you could offer the creditor a $500 payment if they will agree to forgive the remaining balance. Creditors who believe you might not pay at all or who believe you might declare bankruptcy may be willing to accept this. Of course, for this to work, you usually have to already be behind on payments, since a creditor won’t normally negotiate if you are making all your payments on time.  Creditors are also more accepting of this idea if you agree to make a one time lump sum payment instead of proposing a payment plan where you pay back less
  • Try to change the repayment terms so you pay less each month. For example, you could ask creditors to lower your interest rate or to give you a longer period of time to repay the loan. While you’ll end up paying more over time if you stretch out your repayment term, this could give you the room you need in your budget and could make it more possible for you to afford your monthly payments
  • Consolidate your debt. If you still have OK credit, you may be able to take a personal loan or home equity loan and use that to pay back your debts that you are having a hard time with. If you can take a large enough consolidation loan, you can pay back all your debts and have one monthly payment instead of many. The new loan may also have a lower interest rate or a longer repayment term with lower payments, again providing you with breathing room in your budget.

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The Bankruptcy Option

If none of the three above options are possible for you, bankruptcy may be another way to stop wage garnishment. When you declare bankruptcy, an automatic stay is put on collection efforts, so creditors can’t try to get the money through wage garnishment. Then, depending on what type of bankruptcy you declare, you’ll either have debts forgiven after your assets are sold (under Chapter 7) or you’ll be put on a repayment plan that the court oversees that allows you to pay back less than the full owed amount (under Chapter 13).

Getting Help

If you find yourself facing debt you can’t pay and you are worried about wage garnishment, you should consult with an experienced lawyer who handles debt settlement and bankruptcy. Your lawyer can explain what legal options you have to avoid garnishment and to deal with your debt proactively.