WHAT IS IT?
Wage garnishment is when your employer is instructed by a court to withhold a portion of your paycheck in order to pay your debts. There are two main types: wage garnishment (where part of your paycheck is held back) and nonwage garnishment (which is where the funds can be taken directly from your bank account).
WHY DOES IT HAPPEN?
If you owe a debt that you are unable or unwilling to pay, the debtor will often turn to wage garnishment as a way to get their money back. This can include consumer debt, child support, student loans, etc. Garnishment usually lasts until the debt is paid off or the issue is resolved. The amount that can be taken depends on how much you make and what type of debt you are dealing with.
HOW CAN I FIX IT?
First, legally, you have to be notified before the first garnishment takes place. Once you receive this notification, you can dispute it if you feel the decision has been made in error. Make sure you start this process as soon as possible as it may be as little as 5 days before the garnishments begin. Often times, you can reach out to the debtors to come up with a payment plan that does not involve garnishing your wages. If you do have to go through with the garnishments, let your employer know upfront. Your job is protected under a single garnishment, but multiple may result in you losing your job.
WHAT DO I DO NEXT?
Once you work through the garnishment or payment plan, you need to create a plan to fix your credit score. Garnishments will stay on your credit report for up to 7 years, so you will need to take extra steps during this time to either improve it or keep it steady. Click HERE for some additional tips on how to improve your credit score.