Is your paycheck or bank account being garnished? If so, it simply stinks to have someone taking your money without your consent or control. It feels like someone is stealing your money from you. So how can this happen? What can this do to your life? And what can you do about it?
How Can This Happen?
Many people are blindsided by garnishments. These people are living with the false understanding that they were never properly served the complaint because they avoided the service. However, just because you avoid service does not mean that the case cannot go forward. A creditor can always ask that alternative service be allowed because you avoided service.
Also, many people believe that if they do not attend the hearing that a creditor cannot achieve a judgment. The truth is that if you do not attend a hearing your rights to defend yourself against a judgment is waived and it is almost an automatic win for the creditor.
A creditor is able to get a judgment against you then a creditor can seek to receive payment by several means including a garnishment.
What is a garnishment?
A garnishment is defined as a legal procedure by which a creditor can collect what a debtor owes by reaching the debtor's property when it is in the hands of someone other than the debtor. See http://legal-dictionary.thefreedictionary.com/garnishment. In simple terms, a creditor can get to your money even if it is the hands of a third person. Most garnishments are done through wages or bank accounts.
So, if you think that a creditor cannot get money from you because you have none. You better think again.
How much can a garnishment be?
Let us look that the two most common garnishments to give you an idea of the amount that be taken from you by a creditor due to a debt you owe.
Wage garnishment amounts can vary from state to state. Therefore, we should look at the federal statute to give you a good idea about how much you might be facing with respect to the amount being garnished from your wages. Under 15 U.S.C.A. § 1673, a garnishmentsought in federalcourtmaynotexceed 25 percent of thedebtor'sdisposableearningseachweek. See 15 U.S.C.A. § 1673. In some states like Massachusetts it is not as bad, where a creditor can only get 15%.
What does that all mean? For example, if you made $100.00 a week, the creditor could take $25.00 each week from your pay. The creditor would receive $100.00 a month and your wages would go from $400.00 to $300.00 a month. You would be facing a fourth of your income being taken from you a month.
Again, each state may have its own limitations on the amount. However, in general, a creditor can take up to the full amount in your bank account if that amount is owed. For example, you owed a creditor $400.00 and the creditor received a judgment for $400.00. You have $350.00 in your bank account. The creditor can take all of the $350.00 in your bank account. This is a particularly dangerous scenario if you have your pay check automatically deposited in your account. The creditor could conceivably take the entire pay check if the amount of the judgment exceeds your pay check.
What should you do if you have a garnishment?
There are two options. The first is to pay the judgment debt in full. The second is to file a bankruptcy case to eliminate the garnishment and the debt entirely from your life. A creditor cannot garnish your wages or bank account if you have filed a bankruptcy petition. It is the only way to stop a garnishment if you are currently working.
Bottom line, you have to decide if the garnishment from your wages and bank account is something you can live with or if the garnishment will cause you such financial harm that you need to file a bankruptcy to ensure you can eat, pay rent or a mortgage and to just live.