Do you remember that great apartment you had? It came with all the amenities you wanted, and the location was perfect. Unfortunately, it was a little bit more than you could really afford. Eventually you decide to leave before your lease ends to save some money for your next place. Fast forward four years later and the management company sues you for breaking your lease and you now have a $5,000 judgment against you.
When dealing with a debt, always do what you can to not let it go to judgment. Once a creditor has a judgement against you, they have a very powerful collection tool. A judgment creditor can now seek to attach your bank account, put a lien on your property, and garnish your wages. Your first course of action should always be to take the debt head on. Do not shy away from dealing with creditors. The worst thing you can do is ignore a debt. Ignoring it will only make matters worse. Contact the creditor if they have not already contacted you. If you are not disputing the debt, negotiate with the creditor until you reach an amount that is agreeable to you both. Once you have reached an amount that you both agree upon, pay the agreed upon amount as soon as possible. If you find that you cannot afford to pay the agreed upon amount in full, workout a payment plan with the creditor. Do all of this in writing so that there is no misunderstanding later.
Sometimes a judgment is entered against you in court without your knowledge. This can happen if the creditor serves you at your last known address, but you no longer live there. Or someone at your address received a copy of the court summons but did not tell you about it. There are many ways that a judgement can be entered against you in court without your knowledge but regardless of how it happened you need to deal with it as soon as possible. If you are not disputing the underlying debt, contact the creditor and begin the negotiation process. Take the same steps as outlined earlier. If you disagree with the underlying debt and you were not properly served with notice of the lawsuit, you can challenge the entry of the judgment against you on the grounds that you were not properly served and therefore your due process rights were violated. At this point you should contact an experienced attorney in your area and discuss the merits of your case.
When a judgment creditor serves your employer with a wage garnishment order, your employer may not tell you about it. You may find out about the wage garnishment for the first time when you see your paycheck. How much a judgment creditor can take from your pay depends on the state you live in. For instance, in Maryland, a judgment creditor can receive up to 25% of your check per pay period.
So, is it too late once your wages are being garnished to do anything about it? No, you can still contact the judgment creditor and negotiate a payment plan that will leave you with more money than they are taking from your check. If you have a large debt, it may take quite some time for that judgment creditor to receive full payment of their judgement. If you can convince the creditor that they are better off taking a lump sum today, rather than waiting two or three years for a judgement to finally be paid they may be willing to take a lump sum payment. Having a wage garnishment in place is no guarantee that the creditor will be paid in full. A lot can happen in a person's life that will prevent the creditor from collecting through a wage garnishment.
If you find that you cannot convince the creditor to cease the wage garnishment and accept other terms you still have another option. If the wage garnishment threatens your ability to make your mortgage, rent or car payment, it may be time to consider filing bankruptcy. A bankruptcy filing will stop the garnishment and you may be able to get back money garnished from your wages in the past 60 days. You should contact an experienced bankruptcy attorney and discuss your specific situation. Most bankruptcy attorneys will offer you a free, no cost consultation to discuss your case.
So, in conclusion: