Can you lose your job due to wage garnishment?
Problem:
I have successfully completed my graduation 3 months back. I got a job on November 2, 2010. The salary is not great but is enough to cover my basic expenses. During my college days, I took out few loans to finance my education and other necessary expenses. The total debt amount is $20,000. As it is obvious, it is quite difficult for a youth with meager salary to come up with that amount of money. I have few questions. Can my creditor try to garnish my wages? If yes, then can my boss sack me? I have started to pay off the loans through debt consolidation los angeles program. I have not included my student loan in the consolidation program yet. So, what should I do about it? I live in Los Angeles. Any suggestion is welcome. Thanks. Solution:
Good to know that you have got a job when the unemployment rate is still hovering around 9%. Very few young guys take their finances seriously nowadays. It is nice to know that you are not one of them. With experience and right direction, you can get out of this problem easily.
Your first question is whether or not your creditors can garnish your wages. The answer is, the creditors can garnish your wages after obtaining judgment order from the court. Usually, employers look at wage garnishments negatively and there are lots of reasons for it. Studies have shown that the performance level of the employees dealing with wage garnishment is not up to the mark. They spend a lot of their working hours in thinking about the ways to stop wage garnishment. If you are an accountant or something, then your employer may think that you'll manipulate with the cash. They may also think that you are a unreliable person as you have not been able to manage your finances well. Finally, your boss has to talk to the payroll people to obey the court order. A lot of employers don't like that.
However, in spite of this, your boss will not be able to dismiss you from the job. The Consumer Credit Protection Act forbids the employers from sacking workers due to one wage garnishment. But the employers have the legal right to fire you when there are 2 or more wage garnishment orders against you.
I am happy to know that you have enrolled in a program to repay your debts. If you ask my advice, then I would tell you pay off the bills sooner than later. Try to avoid taking out further loans.
Finally, having taken care of other loans, you should now focus on repaying the student debt. I would recommend you to payoff the loans through effective financial plan and personal budgeting. You can also enroll into various relief programs that have been specially designed for eliminating student loan debts.
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