When wages are garnished, it can result in losing up to 25% of your disposable income in order to satisfy debts owed to creditors. Unfortunately, disposable income does not allow for payments such as health insurance, car payments, or even groceries. For the purposes of wage garnishment, disposable income simply refers to what is left after your employer has deducted taxes.
As such, making ends meet after a wage garnishment may prove difficult. Losing access to a large percentage of your wage may address the debt to a specific creditor but it will significantly limit your ability to manage other financial obligations. When you have to decide between putting food on the table or having transportation to work, not having to worry about one debt is no consolation.
Contact the Creditor
If one or more creditors have secured a wage garnishment against you, it does not mean you have no room to negotiate. By continuing to work with creditors, you may be able to negotiate an amount that allows you to better manage your finances. Additionally, you should continue to make efforts to bring payments up-to-date so as to avoid further interest over a longer period of time. Contrary to popular belief, you always have the option of discussing a payment plan with creditors.
Satisfy the Amount in Full
If you can secure a loan through a lender, family member, or friend it may be preferable to managing a long series of payments. This will allow you to pay off the debt to the creditor and prevent further wage garnishment. When opting to resolve the debt through securing a loan from another lender, make sure to thoroughly check the terms of the loan to ensure you are not putting yourself in a worse financial position, such as having higher monthly payments and higher interest rates than in the original loan.
Consider Credit Counseling
Getting into debt is often a snowball effect which can very quickly turn into an avalanche. You can take advantage of credit counseling from nonprofit organizations to help you create and stick to a budget. Once you have created a budget and proven to yourself you can stick to it, rebuilding your credit score through secured credit cards is another option to consider. You can also begin to pay off some of your debt to the original creditor so you can renegotiate for a better payment plan which frees up disposable income.
Bankruptcy may be the most appropriate option for your circumstances. If your debts are getting out of hand, you can consult with an experienced bankruptcy lawyer in Georgia who can provide advice based on your specific financial circumstances. Both individuals and businesses can file for bankruptcy. However, individuals would typically file for either Chapter 7 or Chapter 13. H. Lehman Franklin provides excellence in debt and bankruptcy advice in the state of Georgia. If you are currently struggling to pay creditors and facing a wage garnishment, reach out to our offices for a consultation at 912-764-9616 or at email@example.com. We specialize in helping clients regain financial control through counseling and legal avenues.