Can a Creditor Garnish My Wages?

Creditors will try to intimidate you into making a payment by threatening to garnish your wages; they can actually follow through on that threat yes, but not until they sue you, win, and have a judge decide to garnish your wages as the method of payment.

If you get a legal document about a lawsuit, it’s in your best interests to contact a lawyer. Don’t ignore the lawsuit; it will not help you. When you don’t show up to court, the petitioner (whoever filed the lawsuit) can have a default judgment entered in his favor. This means you automatically owe whatever the creditor sued you for and the court decides how to get the money from you, e.g. wage garnishment. If you receive notice from your employer about your wages being garnished, but never served with lawsuit papers, you should definitely see a lawyer. Chances are, the creditor/debt collector didn’t do something right and you can have the judgment overturned.

You can avoid a lawsuit and garnished wages altogether through debt settlement process before they become seriously delinquent. Creditors can sue you whether you owe them $500 or $50,000. When a creditor sues you and wins, a judgment is entered on your credit report and stays for seven years from the date of filing.

Whether a creditor can or cannot garnish your wages is governed by the laws in your state each state has enacted laws setting forth which property is protected from creditors and which property can be seized by creditors. A few states do not allow any wage garnishment whatsoever, but even those states that do regulate how much can be garnished from a person’s wages in order to allow that person to have something left over to live on, although most people have a hard time living on what is left over after their wages are garnished. There is also federal legislation regulating wage garnishments. Your particular state might follow the federal guidelines.

Wage garnishment laws do not usually apply when you owe money to the state or federal government. Therefore, even if you live in a state that prohibits wage garnishments, such as Texas, you can have your wages garnished to repay a student loan or child support. In fact, almost all states vigorously pursue money owed to them or to pay child support.

Credit card companies, hospitals, debt collectors and others will also seek a wage garnishment to recover debt provided that it is legal for them to do so in the state where the debtor resides and the debt is adequate enough to demand a wage garnishment.