Nothing inspires fear in my clients like the threat of having their wages garnished. But I find that garnishment, or the threat thereof, is oftentimes misunderstood. Here’s what I mean. If you have found yourself behind in payments to your creditors, in attempting to collect that debt your creditor may have told you they plan to garnish your wages. This may well be true, but it is not an automatic step for the creditor to obtain a garnishment, even though oftentimes they make is sound like it is.
In order to obtain a garnishment, the creditor must first file a collection lawsuit in state court. This lawsuit must be served on you for notice purposes by either a process server, deputy sheriff or certified mail and this “service” must be certified to the state court so the court can be assured you are aware of the lawsuit. Once that lawsuit is served you will have either fourteen (14) or thirty (30) days to respond to the lawsuit. If your response is to admit you owe the debt, the state court will likely go ahead and enter a judgment against you and a garnishment may thereafter follow in short order. But the judgment must occur before garnishment can be utilized by the creditor.
Disputing the Debt
However, if instead of admitting you owe the debt, you have the right to dispute the debt by filing an answer stating such. Upon your dispute of the debt, the state court will set a hearing for both sides to present its case. The setting of this hearing will afford you some amount of time before a judgment is ultimately entered against you if, in fact, you do owe the debt. Why is that time important? Because during this interim period you can explore options to avoid a later garnishment. One of those options may be to negotiate a settlement with the creditor whereby you agreement to a repayment plan in return for the creditor agreeing not to file a garnishment against you. Another option would be to explore a bankruptcy option. Both Chapter 7 and Chapter 13 bankruptcies are extremely powerful tools to stop a garnishment. Once the automatic stay goes into effect in bankruptcy, there is no more worry over whether your wages will be garnished.
So do not let a creditor scare you into believing a garnishment will automatically be served on your employer the day after you miss a payment. But if you find that you are struggling to keep your debts paid, use your time wisely to explore your options. If you are considering a filing for bankruptcy relief and wish to consult with a qualified bankruptcy attorney about your options, please contact one of our locations nearest you in Alabama, Mississippi or Tennessee for a free, confidential consultation.
Carla M. Handy is the Managing Partner of the Bond & Botes Law Offices in Gadsden and Anniston, Alabama. She holds a Bachelor of Arts from Auburn University, and a Juris Doctorate from the University of Alabama School of Law. She has been helping families navigate consumer bankruptcy cases since 1994.Read her full bio here.