Stop Wage Garnishment in Indiana

Edited by Hannah Locklear

When you take out a loan or a credit card, you assume responsibility for repaying the obligation. Typically, creditors require you to make monthly payments until you repay the debt. If you fall behind on your payments, you’ll start hearing from your creditors through regular phone calls and letters.

Whatever the reason for your lack of payments, it’s critical to communicate with your lender to avoid legal repercussions. Your creditor will likely try to work with you in the early days of missed payments. It may forgive late fees or allow you to make smaller repayments until you get back on your feet.

If you don’t explain your circumstances to the creditor, it will take further action, like suing you for an unpaid debt or selling the account to a collections agency. A debt lawsuit can result in a judgment, which the creditor will use to garnish your wages in Indiana.

Indiana has strict laws concerning wage garnishment

Indiana has some of the most rigid rules for wage garnishment in the nation. According to Ind. Code § 24-4.5-5-105, creditors can garnish your wages for the lesser of these two amounts:

• 25% of your weekly disposable earnings.
• The amount your weekly disposable earnings exceed 30 times the federal minimum wage of $7.25 hourly.

Indiana has a special rule allowing debtors to request a reduced wage garnishment of between 10% and 25% of their weekly disposable earnings. However, to qualify for the reduced garnishment, they must show good cause to the court. It’s up to the judge’s discretion to grant a smaller wage garnishment percentage.

Ind. Code § 24-4.5-5-105 defines disposable earnings as your income after any required withholdings, such as federal and state taxes.

Generally, creditors must file a lawsuit against you (and win) to start the wage garnishment process. They can’t simply reach out to your employer and request them to begin withholding money from your pay to satisfy a debt.

An exception occurs if you owe past-due back taxes, child support, or federal student loans. The appropriate authorities can file a wage garnishment against you without going through a legal process. The amount they can withhold varies. For instance, people who owe child support may lose up to 65% of their disposable earnings until they repay the amount due.

Let’s consider an example.

In our example, Elaine will pay up to $750 monthly toward her debt, making it much harder to meet her other obligations, like a car payment or rent. She could have avoided wage garnishment if she had taken action before her court date.

Don’t allow creditors to garnish your wages in Indiana

You don’t have to give into a creditor’s debt lawsuit. Instead, fight the case or attempt to repay your debt before your court date. The alternative of wage garnishment is much worse than repaying or settling your debt. A wage garnishment reduces your income for months, and you might find it embarrassing since your employer will know of it.

Responding to your creditor’s lawsuit with an Answer is your first step to fighting wage garnishment. An Answer is your formal response to a creditor’s Complaint against you. In it, you’ll list your reasons for nonpayment or why you believe you don’t owe the debt.

Check out the following video for six tips on responding to a debt lawsuit:

You’ll want to file an Answer even if you plan to resolve the debt before your court date. The Answer will prevent the judge from granting a default judgment against you if things don’t go your way. You’ll have a chance to defend yourself.

You must decide whether you’ll repay the obligation in full or try to settle it. Repaying the debt stops the lawsuit and any further activity from your creditor. The creditor can’t sue you since you no longer owe it any money. You can move on without fear of hearing from the creditor in the future.

However, you may not have the money to satisfy the debt entirely. In that case, you can consider debt settlement. Debt settlement occurs when you offer the creditor a percentage of the debt in exchange for release from the remainder of the obligation.

If the creditor accepts your offer, it will drop the lawsuit and report your debt settled once it receives your payment.

Usually, creditors prefer debt settlement to wage garnishment because they’ll collect money up front. They won’t need to deal with the court or your employer.

There are alternatives to wage garnishment

The pressure of a pending debt lawsuit and possible wage garnishment can be anxiety-inducing. However, you have alternatives. You don’t have to give in to wage garnishment. Instead, try repaying or settling your debt before your court date. That way, you won’t need to worry about a creditor seizing part of your weekly pay.

SoloSettle, powered by SoloSuit, can help you settle your Indiana debt today.

What is SoloSuit?

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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate

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