Probably half a dozen times per week I meet with someone who has been notified that their next check is going to be a quite a bit lighter – wage garnishment. If you are living paycheck to paycheck finding out your wages are going to be garnished is terrifying.
Here in Arizona once a creditor obtains a judgment against you they can take up to 25% of your paycheck.
And what is most surprising is that for many of the people I meet with this is the first time they have heard anything about this judgment and often the creditor.
How can this be? Isn’t this America where people are given their day in court? How can someone get a judgment and start garnishing wages without so much as a letter notifying them that all this court stuff is going on? How did this happen!
While it is true that a creditor must give you notice of their lawsuit against you, “notice” doesn’t always mean what you think it means. Generally after a creditor files a lawsuit against you they hand off the lawsuit to a process server who is hired to come out to your house and “serve” you with a copy.
However, if they can’t find you – or at least tell the court they can’t find you – then the creditor can go back to the court and ask the judge to give them permission to serve you some other way than giving you a copy of the lawsuit in person. This is called “alternative” service.
Here in Arizona alternative service is often done by putting a copy of the complaint and summons in the legal classified section of the local newspaper. You are likely saying to yourself – but hey! No one reads the legal classified ads! And you would be right. No one does read them, and this means that you will likely not get actual notice of your lawsuit.
And even though you didn’t get actual notice of your lawsuit, the clock starts ticking for you to submit your written Answer to the court. And if you don’t file an Answer the court will give the creditor/plaintiff every single penny they are asking for.
Once the judgment is entered, bam! Now your wages are being garnished. And that is how your wages can be garnished without you ever even knowing that you had a judgment entered against you.
Now what do you do? Once a judgment is entered against you there are really three options:
1) Settle the debt - this is where you pay an amount less than what is owed and usually in a lump sum.
2) File a Motion to Vacate the Judgment – this is often an uphill battle. But if you can show some defects in the way that your default judgment was entered you may be able to get the judgment set aside and get a new trial.
3) File bankruptcy. If this is just the tip of the ice berg you can always file for bankruptcy and eliminate this debt completely.
I fully realize none of these are great options. But as with all debt collection issues, if you are facing a debt collection lawsuit you need to act and act soon. The longer you delay the less likely you are going to be successful.