Although applying for and receiving a payday loan can take as little as a few minutes, it’s a serious financial process laced with long-term legalities. Lenders design each payday loan to target borrowers in desperate financial situations, which increases the likelihood of payday loan defaults. When you default on a payday loan or any other type of loan, you are still liable to repay the debt—and lenders will attempt to reclaim the amount in any way possible. Hidden fees, interest hikes, and even wage garnishment are some of the possibilities that face payday loan borrowers.
What Is Wage Garnishment?
Wage garnishment occurs when a debt collector, creditor, or lender takes legal action to obtain the outstanding balance owed. This suit must go to court and, if approved by a judge, it allows the plaintiff to take a percentage from each of your incoming paychecks. Certain forms of income are usually exempt from garnishment, including:
· Social Security
· Child support
· Alimony
· Retirement
Garnishment continues until you are able to repay the full amount owed or until you take other legal action to remedy the suit against you. However, the exact garnishment percentage you’ll face depends on both your state laws and current income.
Will Lenders Garnish Your Wages?
If you default on a payday loan, your lender has the option to sell the debt to a debt collector or continue pursuing the amount payable. There’s no way to tell if your lender will pursue legal action and wage garnishment order, but it’s important to read the entire loan agreement to understand if they are legally entitled to. Even if the loan agreement permits a creditor to pursue action against your loan, the outstanding balance can play a larger part in whether or not they actually will. The higher the balance of your loan, the more worthwhile it is to take the suit to court and file for wage garnishment.
Wage Garnishment Protection
Some payday lenders may threaten borrowers with wage garnishment without any proper legal action, while other lenders can legally pursue wage garnishment until borrowers are obligated to make repayments. Refraining from taking out a payday loan is the only way to prevent the possibility of payday wage garnishment; however, there are still solutions for those who do. If you need advice on how to prevent wage garnishment or are desperate to reclaim your complete paychecks, contact the financial counselors at Progressive Debt Relief. Our team can help alleviate your wage garnishment and get your finances back on track. For more information and a free consultation, call 1-877-590-1847 or submit our contact form.
