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Facing the facts about wage garnishment

Falling behind on your debts can quickly make your life difficult. You may feel overwhelmed and anxious most of the time, especially at night when you are trying to fall asleep. If you could pay your bills, you would, so when a creditor threatens to garnish your wages, it may increase your anxiety.

Because wage garnishment is a long process, you will likely have plenty of warning. However, if you are like many people under the burden of debt, you may have stopped opening your mail months ago and missed the notice that your creditor was taking you to court. If your paychecks are now suddenly much less than they were, you may want to seek some legal advice about your alternatives.

What happens when a creditor garnishes your wages?

Wage garnishment requires your Texas employer to deduct a certain percentage of your take-home pay and send it to your creditor until you have paid your debt in full. Not only does this mean your check is smaller, but it means your employer now knows about your money struggles. However, unless this is not your first garnishment, your employer may not fire you simply because of the garnishment.

Most consumer creditors can take no more than 25 percent of your disposable income, which is the amount left after taxes and deductions, as long as that amount does not place your weekly income lower than 30 times the minimum wage. If you owe federal student loans or taxes, the limit is 15 percent. However, child support and alimony debt can go as high as 60 percent, depending on the circumstances.

What you can do about it

Before creditors take your wages, they have to notify you by mail. This gives you time to take steps to challenge the debt or dispute the accuracy of the notice. Some of your wages, such as veterans benefits, are protected from garnishment unless you deposit them into your bank account. Your creditors may then have access to them if they obtain court approval to levy your accounts.

You may be able to negotiate with your creditors to work out a payment plan in lieu of garnishment. On the other hand, you may simply decide to ride out the garnishment although it is wise to discuss the matter honestly with your employer. If the garnishment creates a financial hardship, you would be wise to seek legal advice. There are options, including bankruptcy, that may work to bring debt relief to your situation.

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