Five Steps to Stopping Paycheck Garnishment with a Hardship Letter

Randolf Saint-Leger reports:

"Having debt hanging over your head is not [a] good feeling. But having part of your paycheck garnished because of default is an even worse feeling. Besides a poor credit score, a garnishment carries an additional stigma. The debt collector must notify your employer about the wage garnishment. Ideally, actions to stop the garnishment should occur well before it reaches that point...Assess your financial situation. This requires that you take account of all of your household income and expenses. Pull together any supporting documentation to substantiate your claim of hardship...Create a worksheet showing your sources of income minus all expenses to calculate your disposable income. This is the amount of money you have left after meeting your basic needs. A high disposable income gives a debt collector just cause to seek a wage garnishment. From a debt collector's perspective, if you're spending $100 on entertainment every month, that's $100 you can put toward your debt obligation. Remember, you have to show financial hardship...Find out the name of the person at the debt collection agency handling your case. Addressing a letter to a person rather than using a generic salutation such as 'To Whom It May Concern' adds a personal touch. Convey in your letter that you have low or no disposable income by producing specific details about your financial hardship and what caused you to default...Include with your letter all the supporting documentation you gathered, such as your household income, expenses and other pertinent information. For example, if your employer is cutting back hours, include this information. Obtain a letter from your boss attesting to this fact to bolster your claim of hardship. If you're the only person working in your household or are responsible for a dependent, include this fact in your letter...Include in your letter what steps you plan to take to address the default, such as making a reasonable effort at a payment plan. Mention any circumstances that have changed recently to make your ability to pay off the debt more likely. This conveys to the creditor your goodwill toward satisfying the debt."