Payday Loan Wage Garnishment - Can a Payday Loan Garnish Wages?

When borrowing payday loan, the borrower has to comply with the rules and regulations set by the lender and one of those is that the money lended is supposed to be repaid on the following pay days. Failing to do so, makes one liable to encounter number of problems following it, notices, frequent reminders call , most importantly the threatening calls for payday loan garnishment. Many people taking out these loans are always warned for wage garnishment even if they are giving part of their pay to the lending company.

So, the question remains can a payday loan garnish wages and is it possible for you to stop that. To understand the question in a better way, one thing to be known first of all is that the money being taken by you is on account of wage assignment or wage garnishment. Though the result imposed in both the case remains the same resulting in lower wage of yours and difficulty managing the daily expenses. To begin with the steps essential to take note of the same, the difference and ways to check it out needs to be known.


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Wage Assignment –

It refers to the sort of agreement made on a paper when a person borrows a loan, whereby the applicant agrees to repay the sum taken within the time scheduled at specified rate of interest. This is the obvious process, applicable for any loan borrowed and the law states the same. The process goes really fast as & when the lender will mail you employer, details concerning the same which is then forwarded on to you for asking your view.

Wage Garnishment -

Payday loan garnishment is not within ones control and much difficult to be handled. Here the lender, first sues the borrower in court and a notice would be issued that states that they are going to garnish your wages. This is followed by hearing when you need to attend the court. When the lending company wins the civil suit filed and a notice following that states of wage garnishment.

It is always better to have your loan paid on time, unless so done and if the above proceeding are done, their actually remains no wait out for you to escape from the process and the wages would be garnished till the loan is repaid in full. Other options that might be considered includes filing bankruptcy.

When the garnish process starts considerable portion of you salary would go into the hands of the lender directly from your employer and the amount for the same is set by federal law and must not be more than 25% of the income. Other laws of the context deals with whether or not the disability income, pension, Social Security and more can be taken under it or not, these usually are not included, though it differs from one state to the other. Also there are states which do not allow garnishing wages for payday loan and while some have different way to stop it from taking place with you.

 


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