I was young and full of a 700 credit score. The world was my oyster. I could apply for loans, cards with high balances no one could stop me. I was unstoppable. That was until I was spending more than I was making. The credit card payments became too high. Before I knew it, I was dodging creditors, refusing to open the letters and then, years later I was hit with the wage garnishment.
The first time was shocking. I was wondering what the hell was going on. Initially, I thought my employer had got me for my hours. I called my manager raging mad trying to figure out why such a large chunk of my check was missing. I called the Marshalls office and made an agreement with them of something I could afford. One week, I was unable to make it to their office before they closed and the next paycheck, my wages were being garnished.
I learned a few tricks about garnishment including the switch up. Switching jobs doesn't STOP your garnishment but it does put it on hold until the company you're working for reports that you're working for them. Most small companies it takes a while almost a year until the next tax time. Larger companies report immediately and you'll be found. No matter where you go, they will take your check until you pay what you owe.
Last Monday was the last day of a garnishment of mine from Capital One. It's been 3 years. I owed them give or take $3,000. I work seasonally and wage garnishments are not allowed to touch things like unemployment so that's something to bare in mind. However, a peculiar event did happen at the end of my garnishment. It appeared that there was a second garnishment, I called our processing company ADP to see what gives. They informed me that Capital One had sent another order in addition to the one on file stating I owed them an additional amount of money for fees and interest. Fortunately, I knew to call the Marshall immediately and have the office fax over a letter that would cease the payments. Capital One had committed fraud by making up an order that never existed to recoup additional funds and hoped that they were dealing with a rookie but they're not.
Here is the direct law regarding wages
In New York State, a creditor can garnish the lesser of 10% of your gross wages or 25% of your disposable income to the extent that this amount exceeds 30% of minimum wage. If your disposable income is less than 30 times minimum wage, it cannot be garnished at all.
The last part is extremely important. If your disposable income not total income, disposable is less than 30 times minimum they can not garnish you but YOU have to be diligent.
Here are some tips to combat wage garnishment in NYC
1. Do not miss court dates. Missing court dates gives them an automatic judgement in their favor which you can have repealed but you don't want to go through that process. Avoid this by showing up the first time.
2. Be realistic and don't let them bully you. These companies will try to suck you dry for every penny you have. Some interest rates are exorbitant make sure you have your paper work from when you signed the contract, some companies (like Capital One) will not only give you a higher interest rate but tag on expenses you never owed in the first place.
3. Keep a calendar with the amounts you paid and what you have left. I was very diligent with knowing my payments and predicting when it would end. A lot of people don't pay attention and end up having to fight these companies for their funds which will take forever. Don't be that person who lets money leave their hand freely.
4. Learn for next time. Wage garnishment is no joke. If it happens to you once make sure it never happens again! Make realistic credit agreements, learn the 30/60/90 rule. Otherwise, it can go on your credit report as a tax lien and makes it difficult for companies to trust your creditworthiness in the future.
5. You don't need an expensive lawyer. Everything you need to know about the law is right there on the free world wide webs.
OTHER POSTS IN MY PERSONAL FINANCE SERIES
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Life after fucking up your credit
Buying a Metrocard can help build your credit