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 Dear
Debt Adviser,
Can a collection company garnish wages before taking me to court? What do I do if they threaten garnishment? How soon can a collector garnish a wage after the collector owns the debt?
-- Chris
 Dear
Chris,
In the United States we don't have debtors' prisons.
Instead, we have garnishment laws, which are about
as close as you can get without the bars. Lenders
need to know that they have serious remedies available
in case of default or they can't lend as freely,
or to as many people, as they do. So, as much
as I dislike the thought of taking a working person's
wages, there is a case to make that it has a benefit.
As to your situation, according
to the U.S. Department of Labor, "wage garnishment
occurs when an employer withholds the earnings
of an individual for the payment of a debt as
the result of a court order or other equitable
procedure." Since I don't think we are talking
about the IRS here (that's one of those other
"equitable procedures"), the answer
to your first question is no. A legal process
followed by a court order is required. During
this legal process you can get a lawyer and go
to court to show your side of the issue and perhaps
affect the outcome.
From your second question, it seems
you feel like this may only be a matter of time.
Obviously since a collector is now involved, you
have a debt out there that is unpaid and yes,
they may threaten wage garnishment. And yes, they
could win. As to what you should do, the short
answer is: everything you can.
My experience with collectors tells
me that they start tough and finish tough, but
that in the middle of the process there may be
some room for accommodation. I'd like to see you
go to a reputable credit counseling agency to
see if they can help either with a budget that
frees up money or a concession that reduces the
debt payment. Armed with a budget and a realistic,
third-party estimate of what you can pay, I'd
make the best offer you can afford to pay to a
manager at the collection agency.
As to how soon the collector will
seek garnishment, the answer is probably twofold.
First, they have to feel they are at the end of
the road from their perspective for collecting
the debt. This means they either aren't going
to make progress or it won't be fast enough for
their company or the one they are collecting for.
The second part can be as soon as they think they
have a case that they can show to the judge that
indicates you were given a chance to pay, but
decided not to.
Because we are talking about the
judicial system, these things do take time. The
first thing that must happen is that the case
is heard in court and a judgment against you will
be issued in the form of a court order. This judgment
will detail the amount you owe and the interest
rate you will have to pay on that amount. If you
don't pay then, next comes an execution order
and then the garnishment.
Still, you do have rights. Title III of the Consumer Credit Protection Act protects you from being fired if your pay is garnished for only one debt and limits the amount of money that may be garnished from your wages. Each state has a garnishment law with some variations on the topic. I encourage you to check them out to know where you stand and what you have to lose.
The bottom line is this: If you owe this debt, you need to find a way to come to terms with it and the collector. Cut your expenses to the bare bones and/or get a second job for the short term if possible, but do your best to pay this debt off before wage garnishment becomes your own debtor's prison.
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