debt

Help! I can't afford my credit judgment

Justin HarelikDear Bankruptcy Adviser,
What can I do if I told the creditor I can only afford $50 a month, but it said I have to pay $100? I turned in a car and I got sued for the balance. So now the creditor has a judgment against me. The balance is growing and I just can't afford to pay more than $50 a month.
-- Lance

Dear Lance,
This is an excellent question. You genuinely have presented to the creditor your best offer and it has rejected that offer. Unfortunately, the creditor doesn't care about what you can afford; nor does the court or a judge. The only thing that matters is what the creditor can do to enforce its judgment. Here are some things the creditor can do to get the money that's owed.

Gavel on money © Derek Hatfield/Shutterstock.com

Wage garnishment

The creditor could be looking for your employer. It can often get that info from your credit report or from one of numerous social media sites, including LinkedIn. Each creditor has teams of people searching the Web for information about you. The creditor can then serve a wage garnishment order to your employer.

The court permits the creditor to garnish up to 25 percent of your take-home pay. This amount may vary from state to state. If this happens, once your employer informs you of the garnishment order, you can object to the amount.

Between the time you receive that order for your hearing, the payment will be deducted from your paycheck. It doesn't matter if that means you can't pay your rent, your car payment or your life-saving medications. The deduction will occur until you get a court order lowering the amount.

Bank levy

At the same time, the creditor can also be trying to find your bank accounts. You may think you only have $50 to pay them. Wait until your bank account is levied to zero and you can't even pay your rent.

You can't keep money in your bank account once a creditor has a judgment. Unless you are actively in a payment plan with them, your account is at risk. The creditor must only find the bank, not the branch, at which you have your accounts. It will serve the bank with a court-ordered levy through the sheriff's department and the bank will freeze your account.

While you ask an excellent question, you can't ignore it. You need to keep trying to find a way to pay them enough to make them happy.

Good luck!

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