Wage Garnishment Stopped Through Payment Plan
Debtor halted 25% wage garnishment by negotiating affordable $500/month payment plan with creditor.
Results at a Glance
Original Garnishment
$850/month
New Payment
$500/month
Monthly Savings
$350
Time to Agreement
60 days
Payment Term
56 months
Garnishment Status
Released
The Situation
James, a warehouse supervisor earning $52,000 annually, had a $28,000 judgment from a defaulted personal loan. The creditor obtained a wage garnishment order taking 25% of his disposable income—approximately $850 per month.
The Challenge
The garnishment left James unable to cover basic living expenses. He was falling behind on rent and utilities. He needed to stop the garnishment but couldn't afford a lump-sum settlement.
The Strategy
James used our payment plan negotiation framework:
- Budget Analysis: Documented monthly income and necessary expenses showing $500/month as maximum affordable payment
- Hardship Documentation: Provided evidence of rent arrears and utility shutoff notices caused by garnishment
- Proposal: Offered voluntary $500/month payment plan in exchange for garnishment release
The Negotiation
James contacted the creditor's attorney with a formal proposal. Key negotiation points:
- Demonstrated that $500/month voluntary payments were more reliable than garnishment (which could be challenged or reduced)
- Showed that continued garnishment might force bankruptcy filing, yielding zero recovery
- Offered to set up automatic ACH payments for creditor's security
After two weeks of negotiation, the creditor agreed to:
- $500/month for 56 months (full judgment plus interest)
- Release garnishment order upon first payment
- No additional collection actions while payments current
- Automatic ACH withdrawal on the 5th of each month
The Outcome
James made his first payment, and the garnishment was released within 14 days. He's now 18 months into the payment plan with perfect payment history. His budget is stable, and he's rebuilding his credit.
Before & After
Before
- $850/month wage garnishment (25% of disposable income)
- Unable to cover rent and utilities
- Facing potential eviction
- No control over payment timing or amount
- High stress and financial instability
After
- $500/month voluntary payment (41% reduction)
- Stable budget with all bills covered
- Avoided eviction and utility shutoffs
- Predictable payment schedule via auto-pay
- Rebuilding credit through consistent payments
Resolution Timeline
Day 1
Garnishment order served to employer
Day 15
First garnished paycheck ($850 withheld)
Day 20
Contacted creditor attorney with payment plan proposal
Day 30
Submitted budget documentation and hardship evidence
Day 45
Negotiated final terms ($500/month)
Day 52
Signed payment plan agreement
Day 60
Made first payment; garnishment released
Key Takeaways
- Voluntary payment plans can be more favorable than garnishment
- Hardship documentation strengthens negotiation position
- Creditors prefer reliable voluntary payments over enforcement
- Automatic payments provide security that encourages creditor flexibility
- Acting quickly after garnishment notice improves negotiation leverage
