Depending on the circumstances, this may or may not be true. In almost all circumstances in order to garnish wages the creditor must have filed a lawsuit. This does not mean that an attorney has sent a letter or that you received a certified letter from the creditor. You will know that a lawsuit has been filed because it will be delivered by the sheriff or via certified mail and will contain a summons and complaint. The summons and complaint will have a case number and will have been file-stamped by a the clerk of courts.
Once a summons and complaint are received you (the Defendant) have a specific amount of time to respond, depending on whether the case has been filed in small claims court or in plenary court (plenary court is everything that is not small claims). If you have been sued in small claims court, the current maximum that a creditor can claim in Indiana is $6,000.00. If you have been sued in small claims court there will be a date on the complaint where you need to appear at court to defend yourself. If you fail to appear on that date a default judgment may be entered against you. If you receive a complaint for plenary court there will be no court date noted on the complaint. In these cases you have between 20 and 23 days to respond (depending on how you received service) or a default judgment may be entered against you. In either situation, if you receive a complaint and do nothing a judgment will eventually be entered against you.
Once a judgment has been entered against you then the judgment creditor can take steps to garnish your wages. First they send interrogatories to your employer. Theses are questions about your pay that your employer must answer and send back to the court to verify your employment and rate of pay. Once the Court has received the answers back from your employer you may be eligible for garnishment. However, garnishment of your wages requires an order signed by the judge.
Therefore, if you have not had a lawsuit filed against you then any creditor who tells you that your next paycheck is going to be garnished is probably telling you a lie. However, if you have had a lawsuit filed against you and have received notice that a judgment was entered and your employer told you they received questions from the Court about your rate of pay there is a good chance that your next paycheck could be reduced by 25%, which is the current rate of pay that can be garnished in Indiana.
I believe that once you receive a summons and complaint it is time to meet with a lawyer. An attorney can help you determine how you should proceed whether it be by disputing the debt, entering into a payment arrangement with the creditor, making a lump sum settlement offer or filing a Chapter 7 or Chapter 13 bankruptcy. By the time you receive a lawsuit you need to have a plan of how to deal with the debt because it is not going to just go away on its own. If you live in Hamilton, Marion, Boone, Madison, Tipton, Howard, Hendricks, Johnson, Hancock or any other county in central Indiana and would like to speak with me about a complaint and summons and more information about bankruptcy and your options please click here for an appointment or call me at (317) 575-8222.
When I meet with potential clients at Halcomb Singler, LLP, about bankruptcy in Indiana I often hear horror stories about what they have been told by debt collectors. I have heard of a collector telling a sick woman that if she didn't pay her bills that her children would have to pay them after she died. I have heard of a collector telling a person that they would call the police if the debt wasn't paid. Thankfully, these are two of the worst examples I have ever heard. However, it is very common for creditors to tell you that they are going to garnish your next paycheck.
Depending on the circumstances, this may or may not be true. In almost all circumstances in order to garnish wages the creditor must have filed a lawsuit. This does not mean that an attorney has sent a letter or that you received a certified letter from the creditor. You will know that a lawsuit has been filed because it will be delivered by the sheriff or via certified mail and will contain a summons and complaint. The summons and complaint will have a case number and will have been file-stamped by a the clerk of courts.
Halcomb Singler, LLP, is a debt relief agency. It helps people file for bankruptcy under the bankruptcy code. No attorney-client relationship with the firm of Halcomb Singler, LLP, is created through this blog. Also, please note that Erika Singler is an attorney licensed in Indiana and does not seek to practice law in any jurisdiction in which they are not properly authorized to do so. The information contained in this blog is general in nature and should not be relied upon for the circumstances of any individual(s) or businesses.
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