Are you are brave enough to try? With many people, their first introduction to a writ of garnishment against them goes something like this: they take their debit card out at the store and hand it to the clerk – only to promptly find out that it’s been declined. Their account seems to have several hundred dollars less than they believed. Certainly, they never went to court to defend themselves when they received notice over unpaid debts; but they never did expect that the court would just issue garnishment orders without warning. It can be a terrible feeling. There is a scene in the movie The Pursuit of Happyness where Will Smith’s character, nearly broke, discovers to his deep sorrow that he has just had most of this money garnished by the IRS. The only thing you can do when something like this happens is to fight back when there is time. How do you stop wage garnishment when it happens to you?
An important reason this happens is: consumers are cut out of the loop
When you are in an impossible situation with your financial obligations, you do need to take time off from work to fight your case in court. But what if you are never given the chance?
Consumer advocates around the country are up in arms against the unfairness of a system that will rule against poor people who just aren’t given an opportunity to defend themselves. Often in these cases, the banks and creditors don’t even serve notice on their debtors. They know that their case would never stand in a court of law.
They simply manufacture fake evidence of having served their debtors and show up in court satisfied in the knowledge that their debtors will never turn up. This way, they are guaranteed a favorable verdict by default. If you are inclined to suspect that banks and other respectable financial institutions might actually stoop so low as to manufacture evidence against poor people, you only have to look at reports in the press about banks that used robot signers during the foreclosure crisis.
They need to not have their debtors present. This way, they never have to offer the court any proof at all that they really are owed what they claim to be owed. They don’t need to justify the unfair penalties and interest charges that they levy, either. There’s no telling what proportion of what they charge is actually fair, justified and honest.
There are many states where even showing up in court and defending your case doesn’t give you any relief from your debt or the high interest rates it comes with. The law allows your creditors to charge you very high interest rates even a couple of years after you win a case sometimes. In other states, creditors don’t even need to show up to win by default; debtors do need to appear though.
When creditors win by default, they just ask the court to issue a wage garnishment order – often for a quarter of their debtors’ paychecks. There are no national statistics for how much of this goes on; there are local estimates though. In some parts of Arizona, wage garnishments are up more than 100% since the year 2005. In Georgia, it’s up 60% over the same period. If you plan to stop wage garnishment, your only hope would be to fight.
Winning is practically guaranteed if you do know about a case brought against you though
It is quite understandable that many debtors may not want to show up in court even if they do know that they are being cheated. Many are just confused and intimidated by the process. They can’t afford lawyers, of course. When consumers do get their act together and fight back even a little though, their creditors often drop the case and run. Much of the time, the debts that these creditors claim to be owed are debts that they have bought from other places. There is no paperwork and no proof. Their only hope of collecting on these shady debts is to make sure that they are never challenged. It is impossible for a debtor to lose in these circumstances. They just have to ask to see a little proof.
You have to stop wage garnishment before it ruins you
Many consumers will just run and hide when they see a court summons – probably because they feel guilty for being unable to pay their debts. While they may be unable to pay what they owe, running and hiding can only make it far, far worse. When creditors win wage garnishments uncontested, they will go on to garnish wages for years for no reason often. They will charge usurious rates of interest that will ensure that everything that is garnished only goes toward paying interest. The principal never gets paid, and they continue to garnish those wages till kingdom come. In many states like Virginia, this is completely legal. The only way to escape this is to actually face up to the challenge and to go to court.
There is one effective way to stop wage garnishment – if you can afford it
It can be a very effective way out of a garnishment situation to file for bankruptcy. If your filing is accepted and your bankruptcy application granted, it will almost completely wipe the slate clean. It’s a great way to stop wage garnishment. It can be a wonderful solution, except for one little problem – it can take $2000 in filing charges.
It wasn’t always like this; the banking lobby has pushed hard to make things this expensive and complicated. They won in the year 2005. If you are poor and you really need to file for bankruptcy to save yourself from paycheck garnishment, you need to really save for months and months before you can afford it. To those who have the peace of mind to think about these things, it seems ironic that it is possible to be too broke to choose bankruptcy.
Consumers who are told they are in debt for a great deal are often not. Most of this “debt” is often simply a bunch of trumped up interest charges, penalties, late fees, and debt bought from debt traders with no documentation. If a person actually has the wherewithal to bring it to the attention of the court, it is usually thrown out. When the court is shown that the debt is almost entirely composed of sums other than the principal, they usually decide in favor of the debtor.
For this reason, when you try to fight a case, creditors will often send debt settlement agents over. If you owe $5000, they will make a show of meeting you part of the way and tell you to settle for $4000. They hope that you will be grateful for the mercy shown and sign right away. Thousands of people do this every year ignorant of the fact that if they would only go to court, the court would probably wipe everything clean.
The lesson to learn here is that it is never a good idea to not fight these things to the end. It doesn’t take that long, and the system is more or less set up in favor of those who fight. It isn’t difficult to stop wage garnishment if you try.