If you have recently been to court and you now have a judgement against you for an unsecured debt, there are a number of ways you can settle the debt. While the creditor likely made numerous attempts to collect on the debt, you may not have been prepared to pay back the debt. When a creditor has won a judgement, this gives the creditor an ability to collect on the debt through wage garnishment in some states. If your state allows wage garnishment, the creditor can seek up to 25% of your paycheck for the balance that is due to them.
Setting Up a Payment Plan with Your Creditor
When a creditor has come after you for non-payment of a debt, they may be unwilling to settle the debt for anything less than a wage garnishment. Your first step is to make an offer to the creditor in writing. You can outline a payment plan to the creditor in order to try and avoid a wage garnishment. Don't offer a payment plan that you won't be able to keep up with every month. If you don't make your monthly payments, your creditor will choose to go with a wage garnishment quickly.
When You Can Afford the Wage Garnishment
If you have a decent job and the wage garnishment is only going to last a few months, you can always leave the judgement and wage garnishment alone. This is the fastest way to pay back your debt, and get back to receiving your full paycheck. While the wage garnishment may cause a dent in your budget for a few months, it's often easier to simply get the debt paid back quickly.
Paying Your Debt Off in Full
When you don't want your employer to know about the judgement against you through the wage garnishment, you can always try to pay off the debt in full. Once you satisfy the judgement against you, fill out the necessary paperwork to file with the court so that any liens on your property will be removed. To prevent any assets from being seized, it's important to pay off your creditor before this happens.
While you have more options before a judgement is filed against you, paying off your creditor can take several forms post-judgement. The faster you pay off the debt, the quicker you can get back on your feet financially. If you aren't sure what to do, contact an attorney today that can walk you through the process, such as Sinsheimer, Stuart J.