Living with Wage Garnishment

Overdue bills, debt, living expenses, responsibilities, and stresses, all of these things can drive you off the edge. And when wage garnishments come to you, it can seem like the end of the world. Your creditor will be able to confiscate a percentage of your wages, typically ranging from 10% to 25% per pay period. This means that your income is reduced substantially and knowing how to survive through wage garnishment is crucial.

Consider Filing a Motion in State Court

In order to issue a wage garnishment or take any other enforcement action against your wages, bank account or other financial assets, a creditor must sue you in State Court and obtain a judgment. Once the judgment becomes final, typically 10 to 30 days after the judgment is taken, depending on which Court has heard the matter, the creditor can then issue a garnishment order to your employer. If your wages are being garnished and you cannot afford to pay the percentage and pay your living expenses, you can petition the Court by way of a "slow pay" motion. The motion sets forth your financial circumstances and allows you to tell the judge how the garnishment is affecting your ability to pay reasonable expenses for you and your family. The Judge may set an amount that you can pay directly to the creditor, but you cannot miss a payment or you waive your right to file another slow pay motion in the future. Also, the Judge may not grant the order and/or the amount the Judge sets may still be more than you can afford.

Ensure you claim property that Creditors cannot take under State Law. Most states, including Tennessee, have exemption laws. These exemptions protect certain property from being seized, garnished or otherwise taken by your creditors. Some examples of property that cannot be taken by your creditors include:

  • Social Security Retirement
  • Public Assistance
  • Certain Retirement Accounts
  • Social Security Disability
  • Social Security Income
  • 401k/IRA and other Retirement Accounts based on age
  • Certain Life Insurance Proceeds
  • Up to $10,000 of personal property per individual
  • Equity in your personal residence depending on your age and whether you have minor children in your household

Just keep in mind that these exemptions must be claimed in State Court before a judgment is entered against you. There are certain proceedings to make the Creditor return property if it falls under an exemption, but it is easier to claim the exemptions before the Creditor obtains the property.

Keep Your Job

Don't quit your job. You need to keep your job to pay off the debt and other bills. Even if you find a new job, your creditors will likely find you and ask for garnishments. Moreover, you will leave bad impressions at workplaces if your creditors follow you to collect debts and begin contacting your employer.

Keep in Touch with Your Creditors

Wage garnishment may affect your payments of other bills. Calling your creditors and negotiating the terms of payments might help you stay on top of those bills. Do your best to convince them that you are going to repay them, and come up with a reasonable payment plan if possible

Cut Expenses Wherever Possible If you have very little debt and feel you can endure the garnishment until it is paid off, you can minimize the impact by setting up a household budget and reviewing it to ensure you have eliminated any unnecessary or luxury expenses. You can check on lowering cell phone and cable bills. You might eliminate a landline phone or other services on the account that aren't used or needed. Consider making use of community resources for food and other needs for your children. Cut coupons and shop sales. These are just some of the things that could assist in making the garnishment less dramatic to your life while you are paying down the debt.

Declare Bankruptcy It is important to note that only one creditor at a time can garnish your wages. In some jurisdictions, there is a time limit for the garnishment and then there is a period of time when another judgment creditor can initiate a garnishment. Even with one creditor garnishing at a time, it may still not be viable to endure the garnishment and provide for you and your family. Unless a creditor agrees to stop the garnishment or a Judge lowers the payment amount, the only action that will stop a wage garnishment or other forms of enforcement of a judgment is to file bankruptcy. The bankruptcy immediately stops the garnishment and allows you to either discharge the debt or make payments under the terms you propose.

Another reason to file bankruptcy before a judgment is entered or shortly after it is entered is that judgments can be recorded at the Register of Deeds' office in your county and can attach and become a lien against any real estate that is in your name now and in the future. Even if you don't ultimately file bankruptcy, it is often a good idea to at least consider the option and the benefits it could provide. If you are interested in learning your options, contact April Randle Law for a free consultation!