Find Out How to Protect Your Money and Resolve Your Debt with a Wage Garnishment Lawyer
The inevitable has happened. Your creditors have served your bank or employer with a writ of garnishment, and now they have access to your bank account and paycheck.
What will be your next step? When your available funds are at risk of being taken by your creditors to pay off your debts, it’s important to act quickly.
Read these three tips, recommended by our wage garnishment attorneys at The Wink Law Firm, to ensure you don’t get sued, your money stays with you, and you finally get rid of your debt once and for all.
Step 1: Understand the Law Behind Wage Garnishment
If you stop paying your creditor, there eventually comes a time when they will sue. Although at first it may seem like they are merely trying to threaten you to pay, you can rest assured that somewhere between 6 and 24 months, you’ll no longer receive warnings. You’ll find out that the your creditors have done the following:
- They’ve gone to court: Your creditors sue you so that they can get a judgment against you for a Writ of Garnishment, which can be served on your employer or bank. Basically, it enables them to force repayment of the debt. You’ll likely know when you get sued because you should be served personally with a Complaint and Summons. While being served is intimidating and scary, it is a sure sign that you should contact a debt relief attorney to find out how to most cost-effectively resolve your debt. If you owe the debt, fighting it in court will likely do nothing other than increase your total cost. It is typically much more practical to focus on the most cost-effective debt relief option for you, either settling the debt or filing bankruptcy. Retaining a debt relief attorney as soon as possible after being served is a good idea because you have at least 21 days to respond to the lawsuit after being served. This is a critical time in which a debt relief attorney can attempt to negotiate a settlement of the lawsuit or buy time to file bankruptcy.
- They make contact: When a creditor obtains a judgment, it can then file for Writ of Garnishment from the Court. Once the Court issues the Writ, it is served on your bank or employer, who will then notify you that this has occurred.
- They begin taking your money: The Writ of Garnishment will serve to immediately freeze funds in your bank account, or give your employer 10 days to start withholding 20% from your take home pay. This is the end game of ignoring your debt, but it is still not too late for debt relief.
- They can take more than you might think: A typical creditor in Colorado can take up to 20% of your wages. If your debts are with the IRS, expect 30% to 70%. The Federal Student Aid Office states that student loan companies can take up to 15%. Back-owed child support garnishment runs as high as 50%. If a judgment creditor serves a Writ of Garnishment on your bank, you can claim $2,500 protected in Colorado. However, this exemption for funds in the bank is not self-executing. If you don’t respond to the Writ timely, the creditor will take your money from the bank even if it would have otherwise been protected. This is yet another very good reason to contact a debt relief attorney. While litigating rarely makes sense, an attorney can help you claim the exemptions (i.e., property protected) provided by law. If you are successful in protecting your funds in the bank from garnishment, you can bet that is not the end of it. But successfully claiming your funds in the bank exempt from garnishment can give you leverage in a settlement negotiation or enable you to file bankruptcy before things escalate further. Filing bankruptcy will stop a garnishment and future garnishments. Unfortunately, wage garnishment is more automatic. If your employer is served a Writ of Garnishment, your employer must start paying the creditor 20% of your take home pay or your employer will become liable for the debt.
It is important to know that garnishments tend to happen with unsecured debt. If your debt is secured debt, meaning it has a physical asset behind it, such as your house or car, the secured creditor will very likely start by foreclosing on your home or repossessing your car if you stop paying the loan. After this, the secured creditor will sell your house or car and apply the proceeds to your debt. If this sale doesn’t fulfill the amount you owe, the creditor will very likely sue you so that it can force payment of the remaining debt.
As if the threat of garnishment isn’t enough, a judgment creditor has another legal means of collection once it obtains a judgment against you. In Colorado, as in many states, the judgment creditor (often a credit card company, medical bill collection agency, or another unsecured-debt creditor) can put a lien on your home and attempt to foreclose on your house.
These aren’t just possibilities or warnings. Our wage garnishment attorneys at The Wink Law Firm have seen this happen to Denver residents who didn’t take their creditors’ legal rights seriously. Stay ahead of your creditors by taking the next two steps.
Step 2: Understand What You Can Do to Protect Yourself from Wage Garnishment
Ideally, you will recognize before it’s too late that you don’t want to get into a situation where your wages are being garnished. It is much more cost-effective and smart to resolve your debt before creditors sue you. A wage garnishment lawyer through debt settlement or Chapter 7 or 13 bankruptcy can help. This will stop your creditors from garnishing your wages, and your attorney will help resolve your situation once and for all.
If you’ve already been notified of wage garnishment, it is important to understand what you can do next under Colorado law.
- 80% of your wages are exempt from garnishment in Colorado.
- If you work 30 or fewer hours per week, additional exemptions apply under Colorado law.
- Similar exemptions exist if your salary or wages are equal to the following formula: 30 hours multiplied by the minimum wage, which is $13.65 in Colorado and $18.69 in Denver.
- You have the legal right to protect $2,500 of your money. If your funds come directly from social security payments or Veterans Affairs benefits (including disability), you can potentially exempt all of this money.
- If your creditor does put a lien on your home, a debt relief attorney can make sure you claim the homestead exemption to either stop the foreclosure or make sure you get a significant portion of the proceeds from a foreclosure sale. In Colorado, you can protect $250,000 of home equity, or $350,000 if you are disabled or over the age of 60.
- Most importantly, take note that you only have 10 days after receiving notice of a Writ of Garnishment to exempt your funds under Colorado law.
You don’t want to take on navigating these exemptions on your own. When you schedule a free consultation with our wage garnishment attorney team at The Wink Law Firm, we can help you throughout the entire process, including finding a solution that will set you on better financial footing.
Step 3: Understand Your Options, Both Before and After Wage Garnishment
Before lawsuits and garnishment begin, you’re in an excellent position to negotiate with your creditors. The faster you recognize that your creditors can and will sue, the sooner you can develop an outcome that costs you less.
Here are the options that a wage garnishment lawyer at The Wink Law Firm can provide before you are sued:
- If you haven’t yet been garnished you can settle with your creditors for about 50% of your total unsecured debt.
- In Chapter 7 bankruptcy, we can help you completely discharge your debt.
- In Chapter 13 bankruptcy, for those above the income threshold, we can help you discharge your debt on a three-to-five year payment plan.
These are your likely options after you are sued:
- If you decide to opt for debt settlement after you are sued, you may end up paying approximately 50% of your debt, plus attorney fees (which are 10% with The Wink Law Firm).
- It is extremely challenging to stop wage garnishment once it has started. Even if you decide to file for bankruptcy after garnishment, you will need time to prepare for bankruptcy. Once you’ve already been sued, you have far less time to take care of this prep work before garnishment begins. Wage garnishment can be extremely hard to halt, once your collectors have begun garnishing. While The Wink Law Firm will help get you the best results no matter the situation, consider taking action before a lawsuit.
Taking an honest look at your financial position before you are sued is the preferable way to go. While The Wink Law Firm can develop a legal strategy to benefit you after you’ve been sued, it’s always a better outcome if you can see the danger ahead and put a stop to it before the situation gets more challenging. That’s how it works with debt. The only time things start getting better is when you put an end to the way you’ve been proceeding and get help.
Protect Yourself with a Wage Garnishment Lawyer Now
If you’re worried about losing control of your finances to suing creditors, you can make a change now and take action to resolve your debt now.
Our wage garnishment attorneys can guide you through the debt settlement process or bankruptcy under Chapter 7 or Chapter 13. We will help you secure an outcome that is far more beneficial than the costs associated with garnishment.
Remember, your creditors don’t have your best interests in mind. They care only about recovering as much of your debt as possible. The business of lending money doesn’t care about your personal struggles. You need a wage garnishment lawyer on your side to make decisions that benefit you first to provide financial relief, position you for a better future, and stop the never-ending cycle of debt stress and anxiety.