By Dean Kaplan+
If you receive notification of a debt from a debt collector and you choose to ignore it, you may end up being very sorry. If you ignore the debt collector and leave them with only the option of filing a lawsuit, this is exactly what might happen.
Prevent wage garnishment by negotiating new payment termsThe best course of action if you are getting behind in paying your bills is to negotiate new payment terms with your creditors before any collectors are called in. Otherwise, if debt goes unpaid for a significant amount of time, it is likely that first a collection agency will get involved, and maybe even a lawsuit will be filed against you if you make no effort to deal with the matter.
What to do if a lawsuit is filed
Once a lawsuit is filed, it is in your best interest to hire a debt collection attorney. Never ignore a lawsuit. If you do not respond, everything that is stated in the lawsuit will be entered in the form of a default judgment. This means that you will automatically owe whatever the creditor sued you for. This can then lead to your employer being ordered to garnish your wages to pay the judgment.
Your employer and wage garnishment
Employers are typically required to tell the employee about the garnishment of wages. They typically take 25% of your pay each pay period and send it to the court to pay towards the judgment amount. This means you will have less to spend for other expenses until the judgment is paid in full.
Employers are not legally allowed to fire an employee whose wages are being garnished. However, that protection goes away after a 2nd and 3rd judgment order has been received. The garnishment will follow you if you decide to change jobs. Creditors can and will obtain a new court order to garnish your wages at the new employer. What you don’t want to do is give your new employer the impression that you are irresponsible or untrustworthy.
When you are in this unfortunate garnishment situation, it is vital that you pay off all your debt as quickly as possible. Do not put yourself into a position of being “chased” by creditors from one employer to another. Your employer will be fully aware of your debt payment status while wages are being garnished, so be sure to make your payments on time every time.
Hiring an attorney may be in your best interest
The bottom line is that once you receive a judgment for wage garnishment, you have very few options for stopping the process short of paying the debt that you owe. By law, a debt collector is required to provide you with lots of lead time to prevent a law suit. Once a debt collector threatens to take you to court to collect on your debt, however, it is time for you to talk to an experienced attorney. An attorney can help you through the process and assist you in understanding which funds are exempt from garnishment, as well as what your rights are.
Can commercial collectors garnish your wages?
Commercial collection agencies collect business to business debt. . If you own a business and are personally liable for a debt, then you can be named as a defendant in a lawsuit along with your business. You are personally liable if you signed a personal guaranty or you operate the business as a proprietorship. Once a judgment is issued, the court can order your business to garnish your wages. Not much can feel worse than having to take money out of your own paycheck due to a court order.
At The Kaplan Group, they not only pursue wage garnishments of business owners, but they ask the court to seize funds in company bank accounts to pay for judgments. They always prefer to work with the business to solve the problem without going to court, but if they are ignored then the court process is the only option.
The Kaplan Group is a boutique collection agency specializing in large (over $10,000) debt collections due from businesses. Founded in 1991, the company has a stellar reputation (A+ rating with the Better Business Bureau) and is recognized as one of the leading collection agencies for results on large and complex matters.