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A creditor can garnish your wages if you have not made the payments and you live in a state where the company can petition the court for a writ of garnishment. There are guidelines that are written by both the federal government and the state government that govern these actions. First, a company that opts to collect a debt from you by asking your employer to withhold earnings from your paycheck must go to court and prevail. If the creditor wins the lawsuit, then a writ of garnishment must be signed by the judge and this is the legal documentation that is required by the employer before withholdings can begin.

A creditor can garnish your wages, but there is are limits on the amount that can be withheld from each check. As a rule you will have no more than 25% paid toward the debt from each check. If you make more than five times the minimum wage set by the federal government, then the amount changes to the greater of the two figures. The entity with the larger exemption, or protection, will be the law that the employer must follow when implementing the court order. These are the rules that apply to private companies that you owe monies to and who appear in court to obtain legal paperwork to attach your earnings. The government agencies will not have to go to court in order to attach your earnings.

The expense of the court hearings and the time involved with deter most creditors from pursuing this option. The amount that you owe will probably be the determining factor. The company will likely make phone calls and send you letters requesting that you pay the bill. Then, the company can hire an agency that specializes in bill collection, and finally they may opt to sell your account to a professional debt collection agency. At any point in these processes you are encouraged to try to negotiate a settlement with the lender before the lender takes court action.

A creditor can garnish your wages, but they must follow the guidelines of the Fair Debt Collection Practices Act (the Act). This Act specifies that a collection agency will not have the legal authority to sue you for the debt or threaten lawsuits if they do not own the debt. If you have received notice that debt collection is in process, you would be wise to consult with a financial adviser or an attorney that is familiar with the laws in your state that govern these collection efforts.

You will only be able to stop the collection processes by paying off the debt or by filing for protection under the Chapter 7 bankruptcy code to discharge the debt. If you choose this route, you will have to understand that you will negatively impact your credit history for up to 10 years. If you do file under the code, the judge will stop all collections until the case has been heard. This is called a stay when the judge orders the collections to stop efforts to collect the debt. If you have had wages withheld by a writ, then these will also cease until the court determines what the outcome of your petition will be. ‘Can a creditor garnish your wages?’ yes, if the state in which you live allows them that option.