It’s like stealing. You work there. They don’t. Yet they are taking your money without asking.
The only real solution to a garnishment is to pay it or discharge it in bankruptcy.
Paying a garnishment can take years. If the debt is from many years ago, and there was no notice or request, this seems unfair. It is. There is no reason to be a slave to a creditor. Discharge the garnishment and debt in bankruptcy.
I was never served! I didn’t even know about the lawsuit. Can a creditor garnish my wages if I did not get notice of the lawsuit or garnishment?
Yes. It is a common complaint. I did not get notice of a lawsuit or garnishment. Don’t I have to get notice or they cannot sue me? Not really. Here’s why.
- You have notice the creditor is mad at you from all of the attempts to collect. They probably even told you they were going to sue to collect the debt. At that time, you had ample time talk to the creditor. The judge will consider that you had constructive notice of a lawsuit.
- A lot of people try to avoid service. If it looks like this is happening, the judge will allow what is called alternative service. Alternative service can be anything from taping the complaint to your door to publishing in a newspaper that you don’t read. Whether you chose to ignore and dispose of the papers taped to your door is of no matter to the judge. The creditor still gets to take a judgment.
- The age of the suit is usually considered as a bar to claiming improper service. Judges are reluctant to disturb a judgment that has been in place for a long time. Even cursory monitoring of your credit report would have showed the judgment. The judge will feel you had notice in one way or another. If you chose to ignore it, that is on you.
- Even if you had notice, you probably don’t have a real defense to the debt. The judge is not going to wast a bunch of court time entertaining a procedural challenge when you owe the debt anyway.
Yes, you have to be properly served in order to take a judgment and garnish. Is the judge going to care? Probably not.
Is there any way to stop an IRS garnishment?
Yes. Bankruptcy. IRS debt that was filed over two years ago and accrued over three years ago might be dischargeable. Even if the debt is not dischargeable, the interest is. You can either discharge the IRS debt in a Chapter 7 bankruptcy, or you can force the IRS to take payments in a Chapter 13 bankruptcy and discharge the interest. Either way, the worst case is an interest free repayment that you can afford. That beats a garnishment every time.
Is there a way to stop student loan garnishment?
Yes. Bankruptcy. I am sure you have read that you cannot discharge student loans. However, if you are being garnished for student loans, filing a Chapter 13 bankruptcy will allow the court to tell them how much you will pay. They no longer get to tell you. The court will also be bound by your disposible net income. You can only pay what you can afford. So, if you have a big student loan garnishment, a Chapter 13 will stop the studen loan garnishment.
When is debt too old to collect? What is the statute of limitations?
Almost never. There is a bar to collecting debt called the statute of limitations. This is a law in many states that siply says debt cannot be collected once it gets too old. However, this is usually granted as an affirmative defense. This means that you would have to assert the defense in order for it to be effective. It would work like this. You would get sued. In the first responsive pleading, usually meaning your answer, you would hace to raise the statute of limitations defense claiing the debt is too old to collect by law. If you fail to do this, or do it after the first reponsive pleading, you lose your opportunity. If you were never served or given notice of a lawsuit, you will never be able to use this defense without permissiion from the judge. Therefore, even though there is a statute of limitations, you probably dont get to use it.
The notice of garnishment says I have ten days to contest the garnishment. Can’t I just say I don’t owe it?
No. Your opportunity to contest the legitimacy of the debt was when you were sued. That time has passed. Your only option now is to throw yourself at the mercy of the court and claim hardship. If this is successful, you still have to pay, just not as fast. This just means that you will be broke for longer. Bankruptcy allows you to not pay any of your debt and stop the garnishment immediatley.