The short answer is “yes, potentially“, but there are certain steps that a collection agency must follow in order to garnish your wages.
If you are facing debts and are struggling to pay them off, you may be wondering what options creditors have to collect the money you owe. One option that creditors may use is wage garnishment, which involves seizing a portion of your wages or salary to pay off the debt. But, can a collection agency garnish your wages?
Let’s cover some of the process.
Debt Collection Lawsuit
A collection agency cannot just garnish your wages without first receiving a judgment / court order that involves a debt collection lawsuit.
Here’s what you need to know about the debt collection lawsuit process.
The creditor must file a lawsuit
In order to collect a debt through a lawsuit, the creditor must first file a lawsuit against you. This typically involves hiring a debt collection attorney to handle the case. The creditor must then serve you with a summons and complaint, which outlines the details of the lawsuit and your rights and options.
You have the right to respond to the lawsuit
Once you have been served with a summons and complaint, you have the right to respond to the lawsuit. This typically involves filing a written response with the court, known as an “answer.” In your answer, you can admit or deny the creditor’s allegations and raise any defenses you may have to the lawsuit.
The creditor may request a default judgment
If you do not respond to the lawsuit or if you admit the creditor’s allegations, the creditor may be able to obtain a default judgment against you. This means that the creditor can obtain a court order requiring you to pay the debt, and they may be able to garnish your wages or seize your assets to collect the debt.
The case may go to trial
If you do not agree with the creditor’s allegations or if you believe that you have a defense to the lawsuit, the case may go to trial. This involves both sides presenting their case to a judge or jury, who will decide whether the creditor is entitled to the debt.
You may be able to negotiate a settlement
Even if the case goes to trial, you may be able to negotiate a settlement with the creditor to resolve the lawsuit. This may involve paying off the debt in full or agreeing to a payment plan. An attorney can help you understand your rights and options and may be able to assist you in negotiating a settlement.
The debt collection lawsuit process can be complex and intimidating, and it’s important to understand your rights and options if you are facing a lawsuit. If you have questions or concerns about a debt collection lawsuit, it may be advisable to seek legal assistance to help you navigate the process.
Challenging the Garnishment
You have the right to challenge the garnishment: If you receive notice of a garnishment order, you have the right to challenge it. This may involve negotiating with the collection agency to resolve the issue or disputing the debt in court. An attorney can help you understand your rights and options and may be able to assist you in challenging the garnishment.
Garnishment Limits
There are limits on how much can be garnished: The Consumer Credit Protection Act (CCPA) limits the amount that can be garnished from an individual’s wages. In most cases, an employer cannot garnish more than 25% of an individual’s disposable income or the amount by which an individual’s disposable income exceeds 30 times the federal minimum wage, whichever is lower.
Income Exempt From Garnishments
Some types of income, such as Social Security benefits, are exempt from garnishment. It’s important to understand what types of income may be protected from garnishment and to consider your options if you are facing garnishment of your wages.
Conclusion
Garnishment can be a stressful and inconvenient process, and it’s important to understand your rights and options if you are facing wage garnishment. If you have questions or concerns about a collection agency’s ability to garnish your wages, it may be advisable to seek legal assistance to help you navigate the process.