Wage Garnishment Process – How It Works and the Legalities Involved
Ignoring credit card debts and failure in re-paying lenders often have disastrous consequences. When debtors fail to settle accounts, they are provided with a short bonus period to make suitable arrangements for returning the money. People who fail in assembling enough resources have to undergo the wage garnishment process.
Wage garnishment is one of those frustrating legal procedures that has devastating financial repercussions. According to a report by Automatic Data Processing INC (ADP), approximately 13 million active employees faced garnishments in 2013 and the numbers have been increasing every year. Due to lack of awareness, a number of people suffered from huge financial losses. If you have a long pending student loan or business debt and you need help in organizing your finances, you should get in touch with a professional firm who knows how to pay off a garnishment.
The wage garnishment process devours the lifetime savings of debtors. Debt collection can take a big bite from the monthly salary and reaches to an extent where it becomes impossible to pay off monthly bills, fill up gas tank or buying daily stuff. Even self-employed people are not exempted from the regulations set by the government. If you are financially unstable, you should consider going for credit counseling or look for debt-solution programs to stop IRS wage garnishment. Here are answers that you might be looking for:-
How to pay off a garnishment?
The rules and regulations for wage garnishment are different for every state. However, in order to pay off a garnishment, you have to contact the attorney representing the creditor and obtain a payoff amount. Upon receiving the money, the attorney will have to file a legal document namely “satisfaction of judgment” and contact your employer to inform about the canceled garnishment. Creditors often charge additional interests, attorney’s fees and processing costs on judgment, which is why it is important for you to be prepared paying some extra bucks than the due amount.
Does wage garnishment affect your credit?
Garnishment proceedings are a matter of public record, which is why it has no direct impact on the credit score of the debtor. Although it is not included in an individual’s credit report, it may create issues in future loan applications. Garnishment is considered as a red flag showcasing the inability of the applicant to pay back the loan on time.
How to stop IRS wage garnishment?
Short term and long term fixes can put an end to wage garnishment. Installment arrangements can fix the problem and put an end to the garnishing process. However, those who opt for long term fixes either submit an offer to compromise or file for bankruptcy. Completing missing tax returns and paying with borrowed funds is also one of the option. The optimum solution for each case varies, which is why it is essential to consult a financial expert in such matters.
The Landis Tax Group, P.C is a well-established firm of law attorneys having expertise in financial matters. Get in touch, if you need assistance in handling financial debt related problems.