Even though your intentions may be good to pay off that debt, or routinely and timely pay alimony or child support, you may not be able to follow through.  Perhaps you got laid off and are unable to find a job right away, or become ill and do not receive a regular paycheck.  As you peruse your list of obligations, you realize payment for some of them will not happen until you are back on your feet.  Experts in money management will tell you to set aside a “rainy day fund” and to do this, per Bankrate.com, calculate your living expenses for one month and multiple it by six months.  This way you have liquid assets available to pay unforeseen expenses should the need arise.  But sadly, not all of lack the willpower or funds to create an emergency fund.

Temporary solution

Your first step should be to contact your creditors and explain that you will not be able to make your payment timely. Initially, of course, your obligations will not be waived altogether, but you’ll probably be given a little leniency, i.e. you and your creditors will attempt to reach some sort of payment arrangement.  You need to be diligent and ensure that you follow through on that suggested repayment plan, because, once you begin receiving a regular paycheck, if you fail to make good on your financial obligations and the debt is left unpaid, the courts have the ability to intervene by issuing a judgment requiring your employer to “garnish” or withhold a portion of your wages or bank accounts to pay back the debt.

Yikes!  Keep from having wages garnished

Your failure to pay down debt or fulfill financial obligations will cause your creditors to seek recompense from you.  The simple solution for any creditor is for them is to put a garnishment into place.  Large companies often have a team of collection attorneys or utilize a debt-collection agency to attempt to collect on the debt by first sending out a demand for payment letter, then usually a follow-up demand letter is sent.  If there is no payment received and/or no response, then the next step is to garnish your wages.  This is usually a surefire way to collect the monies owed, because it is assumed that the debtor does not want his or her employer (and presumably the rest of the word since people “talk”) to know that he or she is in financial straits.  Creditors are required, per state laws, to provide lead time to debtors of any pending legal action, and, that is the preferred means of collection to avoid having their legal counsel file a lawsuit.  But, if lack of payment ensues, the judgment is entered, then the garnishment process begins in earnest.

Once a judgment is obtained by the creditor, the paperwork is sent to the debtor, to avoid the potential embarrassment of having a portion of your pay garnished, once a notice arrives threatening legal action of any type, your best bet is to immediately contact  your family attorney (if you have one), or a New Jersey family law attorney to stop the garnishment process in its tracks.  At that point, if you or your attorney contacts the collection agency or a representative from a credit card company, or the attorney for your ex-wife/children’s interests (in the case of a judgment for collection of funds for back alimony or child support), a resolution may be made sans garnishment.  A top family law attorney in NJ will be able to work with the properties in order to make sure that your debt issues are resolved as painlessly as possible.garnishment process

Next step in the garnishment process

The suggested recourse for a consumer after a judgment has been rendered is to request the court to adjust the amount of the garnishment, especially if the sudden reduction in pay will severely impact the consumer’s ability to support himself and any dependents.

While most people would automatically presume that a garnishment effectively draws from a person’s wages, sometimes there is no job, thus no paycheck to extract from, so what does the creditor do in this instance?  When there are no wages, a judgment holder will go after funds in a bank account.  The bank account funds are “frozen” so that the funds may be funneled to the creditor.  However, federal law prohibits some monies, such as Social Security, disability or veteran’s payments to be used in conjunction with a garnishment.

Thus, it is better to be proactive and strive to have a “rainy day fund” to take on monetary emergencies.  If you are short on funds to pay your creditor(s), your next best bet is contact your creditors and negotiate a payment plan, thus deterring garnishment to come into place, or seek legal counsel.