If you have received a Notice of Garnishment, DON'T PANIC! You may be exempt, but you must do your homework and act FAST!
Although there are various types or reason for a garnishment, for the sake of this discussion, I'm talking about a garnishment as a result of not paying or being unable to pay the unsecured debts you may have, such as:
Now, just because you have fallen behind or even missed a few payments, the creditor CANNOT garnish until a judgment has been awarded.
But, before that happens, here is what usually happens:
1. You start falling behind or have already fallen behind on the minimum payments due on your credit accounts.
2. You will most likely start getting phone calls and/or "nasty" letters from the creditor.
3. If the creditor does not receive any payments for approximately 3-4 months, they may decide to:
A. Charge the account off as a total loss.
B. Assign the account to a Debt Collector.
C. Sell the account to a Debt Collector/Debt Buyer
We have been helping people, like you, deal with all of the various issues that come from facing a financial circumstance that makes it very hard or impossible to keep up with your bills.
The most common mistake people make is to ignore the calls and/or letters. I certainly understand how frustrating and depressing it is to get a call from an over-due bill or a debt collector and how the easiest thing to do is just not accept the call or respond to a letter.
WHY?
Although for the most part, creditors and debt collectors will act in a professional manner, sometimes they may go over line and break the law according to the Fair Debt Collection Practices Act.
It would certainly be worth you time to check out what a debt collector CAN AND CANNOT do when attempting to collect.
The original creditor has the right to call you (as long as they comply with the FDCPA), so as long as the account is still with the original creditor, you cannot prevent them from calling.
However, you can stop them from calling you at your place of employment by telling them that youremployer will not allow any personal calls!
But, once that account leaves the original creditor, you can put a STOP TO THE CALLS!
Even though you may have put a stop to the calls, that doesn't mean that the debt collector will give up. In fact, by not speaking with them, you may cause the original creditor to authorize the collector to FILE A CLAIM.
The many of the debt collection agencies are actually lawyers and if so, they will go to your county courthouse, pay the filing fee and file the claim.
A SUMMONS is issued. This may be be certified mail, but most often, by someone in person. VERY INTIMIDATING!
The CLAIM/SUMMONS is saying that you owe this debt unless you respond with an ANSWER, usually withing 20 - 30 days. This "answer" is what you would do if you absolutely know (and have proof) that you do not owe this debt.
But, if you do, then there is no need for you to pay for and file an "ANSWER" with the court.
We help our clients AVOID A JUDGMENT by making sure they contact us as soon as they receive a SUMMONS. Many times, in fact, most often, we can negotiate either a settlement or a STIPULATED AGREEMENT.
I'm not going to go into all the details here, but you should check out my blog:
"WHAT TO DO IF YOU RECEIVE A SUMMONS!"
If a settlement or stipulated agreement cannot be reached, the creditor or debt collector may decide to go ahead and seek a DEFAULT JUDGMENT.
Once the "default judgment" is awarded the creditor/plaintiff, then they may choose to seek a WRIT OF GARNISHMENT.
Now, the creditor or debt collector can go after your "property".
But, YOU MAY BE ABLE TO PREVENT THE GARNISHMENT BY UNDERSTANDING WHAT IS AND WHAT IS NOT SUBJECT TO GARNISHMENT!
Each state has its own laws pertaining to garnishment, but basically they state that your wages can be garnished up to 25% of your net (after tax) take home wages.
And, they may be able to LEVY YOUR BANK ACCOUNT, unless you meet the EXEMPTIONS provided by law.
I'm not going to give every EXEMPTION here, but if you are subject to a garnishment, you most likely will receive a document that outlines these exemptions.
Some of the most common exemptions (in other words, they cannot garnish if...):
1. You earn $218 or less per workweek.
2. ALL of your Social Security Benefits are exempt!
3. Retirement plans are exempt.
4. Disability Benefits are exempt.
5. And beside those, here are more:
- SSI
- Public assistance
- Unemployment benefits
- Workers' compensation benefits
- Spousal support, child support and other income from a divorce are exempt
- Your home's value! Up to $40,000 for single and $50,000 of equity for jointly held property!
- And there are many, many more...you must check out!
Bottom line:
Attempt to "head off" a garnishment by responding to the SUMMONS immediately.
Contact us if you need help....
