There has been a recent increase in creditor and debt buyer-initiated lawsuits to collect debts. To understand a person’ s/client’s exposure to wage garnishments and bank account seizure, upon representation, the person is not yet able to seek post-judgment remedies. There are legal limits on how much of your wages, government benefits, and money in your bank account are attachable and limitations on whether you have to sell your property to pay off your debts, even if a court does enter judgment against you. Beware that when things get better for a person financially the creditor will look into ways to collect the debt.

A person may have just been sued or will soon be, and wage garnishment will possibly direct an employer to deduct payments from an employee’s paycheck (or to the debtor’s bank to deduct an amount from a paycheck or bank account). State law protects wages from garnishment. To obtain a judgment, a creditor must file a lawsuit. The debtor should take advantage of this time to file an objection to the debt, amount, or garnishment. Objecting will allow you a chance to have a valid reason heard. File an affidavit for hardship for exemption of wage garnishment with the court clerk and send a copy to the judgment creditor and the attorney for the creditor.  The Court will issue a hearing date. Provide proof of income and expenses, such as pay stubs and current bills and receipts. If there is no objection or response to the lawsuit, then the creditor will be able to get a court-ordered wage garnishment.

Knowing that there is or could be a pending lawsuit for a debt, one should realize that the debt will have to be paid. When it comes to almost all unsecured loans, eliminating consumer debt can be done by bankruptcy. A complete analysis of what might happen to a client’s credit due to not paying debts should be considered.  A creditor cannot garnish your wages, bank account or property unless it brings a lawsuit and a judgment is ordered against you by a Court. An automobile dealer or mortgage holder may repossess the collateral if you are behind on payments. The government can take your tax returns and garnish your wages to repay student loans or debts owed to the government without a court order to do so.


Once there is a judgment and a wage garnishment is had, a creditor will continue since they wish to have to garnish wages until the debt is paid in full. Negotiation of the garnishment for a lesser amount is usually not in the best interest of the creditor since the garnishment is already in place and they are receiving payment regularly. Addressing the lawsuit within 20 days of being served with papers is the best and ideal time to resolve differences of computing and contesting the debt and maybe settling the debt for a lesser amount. Most importantly, an agreement of repayment of the debt should be addressed at this time.

Federal Student Loans

These types of loans are a different debt for a person to contemplate. Evaluations of the obligations of a client before filing bankruptcy should be done because discharging student loans is not an option by filing bankruptcy. This may cause problems if there are other accumulated debts that bankruptcy may be of help to the consumer and even more so in the future. Keep in mind that bankruptcies are expensive and time-consuming.

Refinancing vs. Consolidation of Student Loans

When refinancing student loans, you consolidate your existing federal and private loans into a single loan. New loans do not have an origination fee and typically have a lower interest rate. There are many reasons to consider refinancing your student loan debts. From lowering your interest rate, finding a better payment plan, combining multiple loans for simplifying payments, to choosing your long term payment plan, and possibly removing a co-signer.

In conclusion, there are legitimate ways to address a creditor and their attempts to collect an unpaid debt. If you are served papers for a lawsuit for a collection of debt, do not hesitate to call Massey and Duffy for a consultation. There are remedies to protect your assets. There could be an agreement for settlement on a lesser amount and repayment. Remember to see an attorney as soon as possible. The Court will enter a judgment and wage garnishment.


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