If you’re dealing with creditors demanding payments at a time when you can’t pay, you may eventually face legal action for those accounts. That may lead to you ending up with a wage garnishment, which means that money is withheld from either your bank account or paycheck.
If you’re living paycheck to paycheck or have a tight budget, a wage garnishment can be devastating. It can sometimes mean that paying normal household expenses, such as rent and utilities, becomes impossible.
What should you do if you’re facing a wage garnishment?
One of the first things you should do if you’re facing a wage garnishment is to determine what type of debt it’s for. This can help you to determine how to proceed. There’s not always a lot you can do for things like student loans or past-due taxes, except to try to apply for a payment plan.
Are there limits on how much can be garnished?
Wage garnishments typically require a court order, so the amount of the garnishment should be listed in that document. Federal law places limits on how much of your disposable income can be taken to satisfy the debt. Understanding what will come out of your check may make it easier to budget until the garnishment ends.
In some cases, the answer to handling a wage garnishment is filing bankruptcy. This makes it possible to handle these debts either through a Chapter 7 liquidation bankruptcy or a Chapter 12 wage earner’s bankruptcy. In these cases, some debts are discharged at the conclusion of the bankruptcy. Working with someone who’s familiar with these matters may be beneficial, so they can help you to determine how to proceed as you seek financial relief.
