If you owe an outstanding debt, one way that the lender may try to collect is through wage garnishment. This is a legal process and therefore has to be properly ordered by the court — a lender cannot just contact your employer on their own — but it means you have little say in the bi-weekly payments.
You never see your money
With wage garnishment, you never actually get the money. This is not a system where you get paid and then you pay the lender. Instead, your employer takes the money out of your paycheck. The amount being garnished goes directly to the lender, while the rest goes to you.
Say you make $2,000 after taxes every two weeks, and your paychecks are being garnished for 25% of that toward a debt that you owe. Your employer would simply send $500 that you earned to the lender, and your bi-weekly paychecks would be reduced to $1,500.
You can imagine how frustrating this is. You’re still working just as much, if not more, and you’re earning less. It feels like garnishment is not just taking your money, but your time. Can you even make your budget work with 25% less money every month, when you have no extra spare time to work more and increase your earnings?
What can you do?
If you find yourself in this position, it may be time to look into all of your debt relief options to stop wage garnishment and get things back to normal. Sometimes you can negotiate to reduce the payoff on your debt, while other times it may be more prudent to file bankruptcy. Either way, you do have options — and you owe it to yourself to learn more.