With the current unemployment rate at 9.4 percent, many Americans are struggling to make ends meet. Even if they receive unemployment benefits, this amount is barely enough to keep the lights on. Consumers that fall behind in paying their bills may end up being sued by their creditors. The bank or credit card company can obtain a default judgment when people fail to show up for a court hearing. An Earnings Withholding Order will be sent to their employer and creditors can garnish up to 25 percent of the individual’s net income. There are a few ways to stop wage garnishment in California, which we will explore.
Keeping Creditors Away From Your Paycheck
Your first option to stop wage garnishment is to contact the creditor and work out a solution to pay back the debt owed. Creditors might be willing to set up a payment plan when the amount owed is relatively small. Other possible options include:
- File For An Exemption—Some people may be eligible for an exemption if they can show their income is needed to provide the basic necessities of life, such as food, rent or car payment. This must be filed within ten day after receiving the garnishment notice. Once the claim is filed, the court will decide how much of the individual’s paycheck is required for living expenses.
- File For Bankruptcy—Although this may seem like a drastic step, a Chapter 7 bankruptcy can wipe out nearly all of your unsecured debts. Once the petition is filed, the judge issues an automatic stay preventing creditors from taking any further action. They are prohibited from contacting you or pursuing the debt.
Hire a California Debt Settlement Attorney
Garnishments that resulted from a small claims case can be stopped by filing a financial statement with the court. The individual can request that repayment of the debt be done in installments due to financial reasons. The small claims court judge will make the final decision. If your wages have been garnished, contact a lawyer that specializes in debt settlement or bankruptcy law.