By Ryan C. Wood

Many creditors and collection agencies threaten to garnish wages to scare people into making a payment.  The truth is that creditors must first file a lawsuit for breach of contract and obtain a judgment for the nonpayment of the debt.  Obtaining a judgment is not free and will cost the creditor anywhere from $1,000 to $2,000 to obtain a default judgment against someone.  There is a Court filing fee and the lawsuit must be personally served on the defendant.  If no answer is filed to the complaint, then the creditor that filed the lawsuit can request the Court enter the judgment by default.

Once a creditor has obtained a judgment, then they can enforce the judgment by garnishing the judgment debtor’s wages.  Again, garnishing wages is not free and requires a number of steps.  Eventually the payroll department of the person the judgment is against will be served with the writ of attachment/garnishment.  At this point it is only a matter of time before the judgment debtor’s wages will be garnished if all procedures have been followed properly.  A judgment debtor’s wages can be garnished up to 25% depending upon the circumstances.

The good news is that wages that are garnished in the 90 days prior to the filing date of the bankruptcy can be returned if certain requirements are met. While wage garnishment is a sign that it is time to consult an experienced bankruptcy lawyer, it is not the end of the world.  You can stop the wage garnishment and get some of the money back by filing a Chapter 7 bankruptcy or Chapter 13 bankruptcy as soon as the wage garnishment starts.  Contact one of our experienced bankruptcy lawyers today and request a free consultation.