Posts Tagged ‘wage garnishment on payday loans’

How To Stop Wage Garnishment On Payday Loans?

Even if you have fallen behind payments on short-term cash advances, there are ways to stop wage garnishment on payday loans. Though it is very easy to obtain a payday loan, there are some serious drawbacks also that are associated with it, such as the extremely high rate of interest, unusually very high penalty charges, and unfair provisions like automatic rollover. If you miss the deadline and fail to make the repayment in time, you are very much likely to be dragged deeper into a nasty cycle of debt, coming out of which often seems like an impossible task. However, it is very important for you to keep in mind that most states have certain laws to follow in this regard. The good news is that most of the laws are in favor of the borrowers. Therefore, the more you are aware of your legal rights, the better you will be able to protect yourself against problems like wage garnishment.

Understanding The Process Of Wage Garnishment

Before you start looking out for your strategies on how to stop wage garnishment on payday loans, the first thing that is very important for you to understand is how garnishments actually work. As part of the process, your lender first files a civil lawsuit against you in the court. The court sends you a notice (summons) informing you that you have been sued. You file a response to the letter that you will appear for the court hearing and that you are ready to defend yourself. Depending upon the specific factors involved in your case, the court may issue the judgment in favor of the lender and force wage garnishment on you. Once such a court order is issued, your employer gets a notice from the court, where they are instructed to seize a certain portion of your monthly or weekly wages and transfer the fund to the court. The court eventually transfers the fund to the lender. As you can see, wage garnishment is something that can occur only after the court issues an order in this regard. Your lender cannot garnish your wages if there is no such court order.

How Garnishments Affect Your Financial Life?

If you are unable to stop wage garnishment on payday loans, you will end up receiving a much reduced salary every month, which may make it very difficult for you to meet your other expenses and financial liabilities (such as mortgages, car loans, and other such things). Besides that, it is also very important for you to note that garnishments affect your credit score adversely. It stays on your credit report for at least seven years. With bad credit score, you may be charged a higher amount of premiums on your insurance policies. Even other lenders may also raise their interest rates because of your damaged credit score.

Is It Possible To Stop Garnishment?

If you follow the right approach and work on proper strategies, it is very much possible to stop wage garnishment on payday loans. You can start your efforts by discussing your problems with the lender. Most borrowers often start ignoring their lenders at this stage; they even stop responding to their calls and notices, which is not the right way to handle this problem. If you are avoiding your lender, you are actually making your problems worse. It is very important for you to keep in mind that even your lender is only interested in getting their money back. If there is a way to get their money back without garnishment, they may consider such options. Therefore, you must talk to them without any hesitation and try to work out a more affordable repayment plan. If the lender accepts your proposal for new payment plan, make sure you get the agreement in writing. Once you sign the agreement, you just have to make the payments as per the new plan without making any further default.

While you are looking out for ways on how to stop wage garnishment on payday loans, it is also important to note that most states have enacted certain legal provisions, where an affordable repayment plan has been mandatory for the lender. Therefore, you can be in a better position during the negotiations if you are aware of the laws applicable in your state. Please note that even Internet based lenders must abide the payday loan laws of your state.

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