How to Stop Wage Garnishment from a Debt Collector?

Even if you’re expecting it, wage garnishment by a debt collector can shake you to your core. After all, if you were financially well off, you would have been able to take care of your debts. Working day in and day out only to have a chunk of your paycheck disappear can be devastating – both emotionally and financially. However, there are circumstances under which you can reduce or stop wage garnishment from a debt collector.

How can a debt collector garnish my wages?

In most instances, a debt collector is able to garnish your wages because they obtained a court order to do so. They would have sued you in order to collect the debt, and either you appeared in court to defend yourself and lost, or you didn’t appear in court and the judge granted a summary judgment against you.

With a summary judgment in hand, the debt collection agency likely contacted your employer, usually via local law enforcement or a marshal. In turn, your employer should have notified you of the garnishment and provided you with information about how to fight the garnishment.

Why is so much of my paycheck being garnished?

Federal law sets a limit on how much of your earnings can be garnished. That limit is 25 percent of your net income or any amount over 30 times the federal minimum wage (currently $217.50) – whichever is lower. However, many states have laws in place that further restrict the amount that can be garnished. Read more about state garnishment limitations here.

Can I challenge wage garnishment?

If your wages are being garnished because a debt collection agency sued you and obtained a court order, then you can attempt to vacate the judgment. If you’re successful, then the garnishment will stop and the debt collection agency may have to reimburse you for the money they’ve already taken from your paycheck. In addition, the judgment must be removed from your credit report.

There are three approaches to successfully vacating a default judgment against you:

• You have a good excuse for missing your court date.
• You don’t owe the money.
• You were improperly served.

A good excuse for missing your court date is if you didn’t receive a summons instructing you to appear in court. Others might be that you were sick or unable to take time off work. An argument that you don’t owe the money might be that you were the victim of identity theft and the debt isn’t yours to pay or that you dispute the existence of or amount of the debt. You might also be able to argue that the debt was past the statute of limitations and therefore legally unenforceable.

You can also argue that you were improperly served. In Sykes vs. Mel S. Harris and Associates, LLC, several companies were accused of “sewer service.” Sewer service is a term used to describe instances when consumers are sued in court but are never notified that they are being sued and so can’t appear to defend themselves. In the Sykes case, the company obtained more than 100,000 default judgments against consumers after attesting to the court that they’d notified the consumers. In truth, the company never told the consumers they were being sued.

If you’re not able to successfully challenge the garnishment itself, you can go to court and argue that the amount of the garnishment is an undue hardship. If you successfully argue that the amount is too high, then the court will modify the amount of the garnishment.

What if my wages are being garnished because of student loans?

If you have defaulted on student loans held by the U.S. Department of Education, the debt collection agency won’t get a court judgment. You will simply receive a notice stating that your wages will be garnished. You can avoid that garnishment by requesting a hearing within 30 days of receiving the notice. During the hearing, you can argue that the garnishment would pose an undue hardship, or you can challenge the existence or amount of the debt. If the judgment is in your favor, the debt may be dismissed, the garnishment may be postponed for one year, or the amount garnished may be reduced.

Lemberg Law has a team devoted to representing people whose wages have been garnished, or who have been harassed, threatened, deceived, or abused by debt collectors. Call 844-685-9200 and receive a free consultation, or submit our online request form.

Case citation

Sykes vs. Mel S. Harris and Associates, LLC, No. 09 Civ. 8486 (S.D.N.Y.)