Can You Stop Wage Garnishment in Colorado?

If you are struggling to make ends meet and pay your bills, every penny counts. You can’t afford to lose part of your income to a wage garnishment. At the same time, if you owe creditors and don’t make the required payments, you may find yourself facing lawsuits and potential garnishments.

There are ways you can fight wage garnishments of this type in Colorado. From petitioning the court for help to the automatic stay of bankruptcy, we cover a few ways you can stop wage garnishments and potentially buy yourself some time to get back on track financially below.

What Is Wage Garnishment?

Wage garnishment occurs when a creditor requests that your employer take money out of your pay and send it directly to the creditor. Creditors don’t have the power to do this on their own. They can only make a garnishment request if they have gotten a judgment in a lawsuit against you for the debt. They must also get a court order for the wage garnishment.

Note that this guide covers consumer debts and garnishments related to them. That means debts related to credit card accounts, loans, and other types of credit. The rules for garnishment related to tax debt, child support, student loans, and alimony are different.

How Does Wage Garnishment for Consumer Debt Work in Colorado?

To start, the creditor must file a lawsuit against you. You have a chance to answer the lawsuit and present your case in court. You may be able to stop any future wage garnishment from happening by presenting a case that allows the lawsuit to be decided in your favor, which means the creditor doesn’t get a judgment against you.

If the creditor does get a judgment against you, they will seek information about your assets, accounts, and employer. This information helps them file liens and levies or request garnishments. The creditor may seek a court order for the garnishment and serve it on your employer.

While the creditor can only request a certain percentage of your wages each paycheck, a garnishment can put a serious dent in your income. This can make managing finances difficult, especially if you were already struggling to pay your bills before.

Ways to Stop Wage Garnishment

You can fight wage garnishments in a number of ways. We’ve summarized a few options below.

Fighting the Lawsuit

As already stated above, one of the best ways to keep your wages from being garnished is to keep a creditor from winning a judgment against you. If you don’t actually owe the money in question, this is a good tactic. If you dispute the information, the creditor will need to present documents proving the debt is valid to win a judgment.

You should never simply ignore a notice of summons about a debt-related lawsuit. If you do nothing, the creditor will win a default judgment. Instead, consider asking a debt defense lawyer for help in the case.

Paying Off the Debt

If you owe the debt and can pay it off, you won’t be subject to garnishment because the debt won’t exist anymore. Settling the debt before the court date can help reduce expenses and provide you with more peace of mind.

However, in many cases, a lawsuit means you haven’t paid the debt in quite a while. This may mean that you’re struggling with finances, which would mean you probably don’t have the money to pay the debt off in one lump sum. If that’s the case, check out the remaining two options below.

Petitioning the Court for Relief

You may be able to petition the court to reduce the amount of a garnishment or suspend it temporarily. You would do this if the garnishment is already in place but you need some financial relief. For example, if your income has dropped since the garnishment has gone into effect, you’ve had a medical emergency that resulted in more expenses, or another major life event has changed your financial situation, you may be able to make a case that the garnishment doesn’t realistically leave you with enough money to live. Talk to a wage garnishment attorney to find out about potential exemptions or objections that might be relevant to you.

Filing Bankruptcy

When you file Chapter 13 or Chapter 7 bankruptcy, something called the automatic stay goes into effect. Essentially, this is like a freezing of all debt collection activity to allow the bankruptcy process to move forward.

The automatic stay applies to wage garnishments. As soon as you file a bankruptcy petition, creditors must cease collections activities, including seeking a garnishment.

Bankruptcy is a big financial decision that has long-term ramifications on credit and your future finances. While it may be tempting to file a bankruptcy petition to stop collections activities, you should ensure that this is the right decision for you before you move forward.

Talk to a Bankruptcy Attorney

Making the right decision can be difficult when you feel backed into a corner — and that’s often how people feel when they are facing lawsuits from creditors and wage garnishment requests. A free strategy session with an experienced bankruptcy attorney can help you understand what your options are and make a more valid decision, even in the face of financial distress.

To find out more about how we can help and to learn about your options, contact the Holland Law Office. Give us a call at 970-232-3097 to make an appointment.