When you take a loan from a creditor and do not make payments on time, you may face wage garnishment. Wage garnishment is a way of legally withholding money from your paycheck to pay a party. If your creditor sells the debt or hires a debt collection agency to recover the money, you may face wage garnishment at one point.
There are several ways to avoid a wage garnishment instead of opting for bankruptcy. Losing money from your paycheck can ruin your financial situation even more. Speak to a Chicago debt collection defense lawyer to know your options in more detail.
Ways to stop wage garnishment
Respond to the creditor’s demand letter.
If you have not been paying your dues timely, your creditor might obtain a judgment against you. One good thing is that the creditor is required to send a notice before the garnishment finally begins. This is called the “demand letter.” When you receive a demand letter from your creditor, do not make the mistake of ignoring it.
You would be surprised to find that many creditors are willing to negotiate. They would rather accept voluntary payments than deal with the time-taking and expensive legal procedures of wage garnishment.
File an exemption claim.
Just because a wage garnishment has already been obtained does not mean you cannot file an exemption claim. If you wish to stop the wage garnishment procedure or at least decrease the amount based on your financial situation, you may file a claim. For example, your claim might win if you have an elderly parent or a child at home.
Get debt counseling.
Debt counseling is an effective way of escaping wage garnishment where a professional helps you negotiate with the creditor. The counselor helps you work out a way and reach an agreement with your creditor, making it easier for you to repay the loan.
If the creditor agrees to the plan offered by the debt counselor, they cannot continue the garnishment as long as you follow the agreed payment plan.
Challenge the garnishment.
You may be able to challenge the wage garnishment on various grounds. For example, you could file a claim that more money was taken out of your paycheck than was said or the creditor is not following the correct proceedings.
Also, make sure you review the documents regarding the debt and check if you even owe the debt. Often, a debt collector may try to collect money for a debt you do not even owe anymore.