Wage garnishment is a judgment by the court making it mandatory that a portion of your income be applied to your debt balance. More than 90% of people who are sued by creditors simply do nothing. Of course, this is probably the worst thing you can do when faced with a judgement. Often this results in wages garnished, and little recourse for the consumer.

Before going any further, let’s discuss what a garnishment judgment is. You have a while, usually 20-30 days depending on your jurisdiction, after you are served with a lawsuit to respond. If you still don’t submit an answer to the lawsuit, the court can enter a default judgment giving the debt buyer everything they are asking for.

You didn’t respond, or appear to defend yourself so you have no way of winning. If you haven’t responded or appeared, the creditor wins the case by default. Once this happens, they can legally garnish your wages and pursue additional legal action.

It goes without saying that you should respond promptly and accurately.

How much of your wages can be garnished?

The extent of wage garnishment depends upon the disposable income. A garnishment is determined based on income and disposable income. There are limits to these garnishments, of course. The limits vary state by state and are affected by the type of loan being collected.

In general, either 25% or the amount by which your weekly income exceeds 30 times the federal minimum wage which is currently $7.25 an hour. Whichever of these figures is less is garnished from your paycheck. This garnishment goes directly to the creditor who’s placed it, which could represent credit card and medical bills, personal loans and most other consumer debts.

For example,

• If the weekly disposable income is $290 or more, 25% is collected towards wage garnishment.
• If the disposable income is between $289.99 and $217.51, the amount above $217.51 can be ripped off.
• If it’s $217.50 or lower, the garnishment is restricted.

What to do when you get a garnishment judgment? Is there any recourse?

The first thing to do is to read the judgment carefully to verify the information to ensure that it’s, in fact, your debt and not something you already paid. If it is, calculate the amount which will be garnished and how it will impact the financial situation. If it seems difficult, consult a consumer law attorney or local legal aid to determine the best option for your situation.

If you are facing the garnishment, you should resort to the following:

Contact the creditor or collection agency to validate any debt you are asked to pay and ask for proof of the obligation.
You should be ready to respond to any court summons. Failure to turn up at the court hearing will likely treat a garnishment judgment against you.
To avoid wage garnishment, explore all available alternatives including debt settlement and debt consolidation.

Wage garnishment generally continues until paused by the court order or until the debt is paid in full. It is indeed better to be proactive and try to avoid garnishment by working out a repayment plan with the creditors. It should be noted that if a written answer to the lawsuit is not submitted, it will result in a default judgment for the creditor.

To do list when you actually face a writ lawsuit for wage garnishment:

You actually have a few alternatives when there is no slip-hole and you face the writ lawsuit for wages garnishment judgment.

• You can ask the court to set aside the default judgment and give you an opportunity to challenge it.

If you believe that there is seriously some mistake done by entering a default judgment against you, you can fight the lawsuit stating any of the below 6 genuine reasons of Rule 60.

• Excusable neglect
• Freshly discovered evidence
• Fraud
• Void judgment
• Discharged judgment
• Any other specific reason which justifies release from the default judgment.

You can settle the debt with the creditor for an amount less than what the default judgment is for.

You actually lose the leverage of settling the debt once the judgment is entered. So, now prepare and establish a budget of whatever you are able to do to settle the debt in a lump sum or on a monthly basis.

Finally, you can opt to eliminate the default judgment completely by filing for bankruptcy.

While bankruptcy affects your credit score negatively, sometimes it’s the only option left if the lawsuit being dealt with is only the beginning. It will eliminate most of the debts, as well as the judgment.

The post Are your wages garnished thanks to a past due debt? appeared first on Consumer Debt News.

At the dawn of a new economy, the 21st century Unicorn termed as ‘Cryptocurrency’ is a side product of Digital cash. While it is being accepted by the overwhelming community of people; even the bankers, consultants, developers, scientists are ignorant of its features.

In simple words, Cryptocurrency is a virtual currency, most notably Bitcoin, a decentralized digital blockchain cash system. It is based on Peer-to-peer network technology. Let’s understand its monetary properties.

Controlled supply of tokens.

The supply of tokens or Bitcoins gradually reduces with time which means the future monetary supply of cryptocurrency can be roughly calculated in the present!

It’s a Bearer and not a Debt.

The numbers appearing on the ledgers in traditional bank accounts are nothing but debts whereas Cryptocurrencies represent themselves and are as hard as gold coins.

Having understood the basics of cryptocurrency, now the question in debate is with the rise of cryptocurrency, will we ever be paying our debt with it, or creating a new form of debt – crypto-debt? Let’s discuss.

The International Monetary Fund (IMF), led by crypto friendly Christine Lagarde, published a global debt report which highlighted a massive ticking debt bombing number! — $182 trillion worth of pay debt with Cryptocurrency exists worldwide.

The situation is present because the governments and central banks kept printing additional money to pull the economy out of recession. To handle this burst of the inflated bubble, Cryptocurrencies, more particularly Bitcoins or ‘Digital Gold’ and Ether were invented.

Main flaws in Central Banking:

• Lack of transparency
• Politicization of money supply due to centralization

Features of Cryptocurrency:

• Transparent
• Rapidly evolving Crypto debt markets are transparent, open and most importantly, decentralized.
• Generate yield

With its feature of censorship-resistant borrowing from a Central bank, lending the assets or earning interest to secure the blockchain, these systems promise to give investors new opportunities to generate yield.

Nominal Transfer cost

If the conventional money is converted into Crypto-coin and then transacted using this crypto coin, it will reduce the pressure of inflation.
Easy secured maintenance

Crypto money does not require any additional expenses for maintaining security unlike the processing fee in transferring the conventional money.

Myths about cyber currencies:

Every coin has two faces. This is sarcastically true with Bitcoins as well. Along with the advance features of Cryptocurrency, there are some vital myths that need to be clarified in its context.

Abnormal Liquidity

Every holder wants to earn interest on their crypto-assets, creating a large market imbalance and unattractive interest rates.

Decentralized debt markets still cannot outsmart before they reach the maturity and sophistication of the existing financial system. They have flaws in both price discovery and liquidity. Interest rates vary widely across each market and orders are relegated to order books.

Cybersecurity issues

The cybersecurity breaches in modern digital technology are costing investors huge amounts which may not be recoverable once fallen into the hands of hackers.

The vital mitigation measures in virtual currencies are not available like in traditional banking sectors.

Volatile nature and lack of inherent value

Bitcoin is not without its problems added to their lack of inherent value. The Cryptocurrency needs to be linked directly to the tangible and intangible assets to overcome its extent of volatility.

As the Bitcoin or Ether ecosystem develops and price discovery takes shape, Crypto-debt markets will play an increasing role in helping the ecosystem grow, allocate risk, and offset protocol inflation. As would be the case with anything new, to decide whether the Cryptocurrency is boon or a bane depends upon the multi-altitudes it might take in different directions of the emerging technology.

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