How Do Wage Garnishments Affect Your Records?

Currently affecting thousands of Alabama residents annually, wage garnishment can prove to be a significant hindrance for anyone that doesn’t deal with such issues appropriately. Unfortunately, most people that have experienced—or are about to experience—wage garnishments don’t understand its many implications.

Among the different points for curiosity that arise when wage garnishments occur, the fact that these developments are public record is a significant cause for concern. 

So, how do you stop one from affecting your records? 

What Is A Wage Garnishment?

Wage garnishment is best defined as a form of forced debt collection that requires a settlement process and affects your employer as well. 

Whenever a liability is collected through this method, the borrower’s employer is sent the results of a judgment issued against them. Once a notice is sent in, the party receiving the instruction is urged to follow the directions outlined in the document, which usually fall along the lines of taking a portion from their employee’s salary and sending it to a creditor.

In terms of duration, the length is relative. Of course, those undergoing wage garnishments will continue to experience forced collections until their debt is paid off. The amount collected can come from different sources such as salaries, bonuses, wages, commissions, and pension and retirement income. 

Beyond taking a cut out of one’s paycheck, a wage garnishment can indirectly impact one’s credit score. Mistakes or poor financial habits such as late payments and mounting debt can end up dragging your rating down while affecting other factors concerned with your everyday life, such as:

  • Taxes
  • Alimony and child support
  • Student loans
  • Consumer debt (such as loan applications and home rental payments)
  • Employers

Why Is It Disadvantageous to Have Wage Garnishments on Your Public Record?

By law, record-keeping entities are required to keep wage garnishments posted in a record for up to seven years, making one’s life much more difficult in the same period.

This means anyone accessing your records can see these negative entries. Unfortunately, a simple background check can pull up this sensitive information. This usually means that anyone that has any business looking at your finances and records—such as lending parties and future employers—can see these entries and have more reason to scrutinize your application.

Can You Stop Wage Garnishment?

Absolutely!

For anyone dealing with the possibility of a wage garnishment, it is possible to prevent it by taking matters to court. During scheduled proceedings, borrowers can negotiate with their creditors to set up an agreeable payment plan based on what they owe and how much they can afford to give up. 

This course of action is crucial because it opens up other avenues, such as:

  • Declaring bankruptcy
  • Receiving an Offer in Compromise
  • Receiving a Financial Hardship Exemption


Now, before you take things to court and let a jury handle your predicament, you must know that losing a wage garnishment suit in court means having a judgment set against you. This is why it pays to invest in the capabilities of a tax or debt resolution expert like Axiom Tax Resolution Group so you can minimize your risk of more complications along the way.

Conclusion

Dealing with the implications of wage garnishment is never easy because of all the compromises and conditions it entails. This is why it’s crucial to stop such a process before it becomes necessary. If you are in a situation of having your pay garnished in lieu of debt payments, this guide can help you avoid the worst.

If you end up with a wage garnishment and need assistance for tax relief solutions or IRS debt forgiveness, contact Axiom Tax Resolution Group for quick and effective aid to resolve your issue ASAP!