Putting a Stop To Wage Garnishment

An old debt can haunt you, or more precisely, your savings. Creditors have the right to file a credit card lawsuit against delinquent debtors who failed to repay outstanding debts for months, even years. If say, the creditor won the credit card lawsuit, the court will grant them the right to garnish wages. The writ of garnishment, issued by federal court, is an order to a debtor’s employer to garnish an employee’s wages, cutting a certain amount from each issued paycheck and remitting the money to a specified account for a certain period.

If you lost a credit card lawsuit and the court ordered your wages to be garnished, no amount of pleading will make the judge change his or her mind. However, you can have the ruling reverse though it certainly won’t be easy.

If your monthly income is slashed off significantly because of the court ruling, enough that you can no longer meet basic necessities of life, it’s best to file for Claim of Exemption to the court which issued the writ of garnishment.

To file for Claim of Exemption, you have to fill out an application form and attach billing documents, proof of income, loan application numbers if any, etc. The key is to convince the court that the ruling is causing you deeper financial problems. If you successfully convinced the court, you will be exempted from further deductions from your paycheck.

Another way to stop wage garnishment is to contact your creditor or their lawyer for an amicable debt settlement. If possible, you could issue post-dated checks to ensure them that you will pay everything at the agreed date. However, this has to be done before they file a credit card lawsuit.

If your creditor does not want to negotiate a settlement outside the court, you can consult a debt counselor. A debt counselor will check your financial problems and will draft a consumer proposal to the local court to help you manage your debts better. Consumer proposal is a legal process conducted by a federal court. Note that this process is best for debtors who have more than $5,000 in debt.

You can also apply for a debt consolidation loan to help you settle all outstanding balances at the same time. However, you are bound to pay higher interest charge for debt consolidation loan if you have bad credit score and credit history.

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