Q: I have just received a civil judgment with consequences of my wages being garnished. What legal steps can I take to reverse that and resume negotiations with the collection agency?
A: As with any legal situation, it is best to consult an attorney to determine your best options.
Based on the information included in your question, it sounds as if you missed or were not informed of a court appearance. In order for a creditor to receive a judgment, which can be used to issue a wage garnishment order, it must be issued by a court. Legally, the creditor must inform you that you are being sued and provide you with the court date so you can appear in court or send in the required paperwork to defend your side of the case. If you were not properly informed of the court date, your attorney may be able to have the court stop the garnishment.
In general terms, to attempt to have a wage garnishment ended, modified or reversed, you have these options:
• First, you could attempt to negotiate a monthly payment agreement with the creditor/collector. Keep in mind that the creditor is already receiving a payment each pay period from the wage garnishment. So, unless you offer to pay more than the garnishment amount, the creditor is unlikely to consent to a monthly payment agreement.
• Second, you could file a claim of exemption with the courts if you believe that the garnishment is preventing you from meeting your basic living expenses. You will need to provide proof of your monthly income and expenses to the court. If the court agrees with you, the garnishment would be set aside and your employer would be ordered by the court to stop the garnishment.
• Third, you could file an appeal with the court if you do not agree with the garnishment. The garnishment paperwork you received will include instructions on how to file an appeal. You simply explain to the court why you believe the garnishment should be reversed. You have a specified amount of time to file your appeal and that will be included in the garnishment paperwork as well.
• Last, you could file for bankruptcy. Once the bankruptcy is filed, creditors must stop collection of debts including through wage garnishment. Exceptions would be for federal or child/spousal support debt.
You also have the option to pay what you owe in a lump sum. Once the debt has been paid in full, the garnishment will end. Keep records of your payment to assure that you have proof the debt was satisfied.
I realize you don't like it, but you could do nothing and the wage garnishment will continue until the debt is paid.
In addition, rules exist to protect consumers regarding wage garnishments. In general, federal law caps the amount that can be garnished at 25 percent of disposable income (after federal, state and local taxes, Social Security, unemployment insurance and state retirement systems).
I recommend that you consult with an attorney before you make a decision on how to move forward.
Tanisha Warner is the communications manager for Money Management International, the nation's largest accredited credit-counseling firm. She answers readers' questions for www.creditcards.com