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Is Having A Garnishment Better Than Filing Bankruptcy?

When creditors come knocking and calling to collect overdue debt, one of the first thoughts many consumers have is whether filing bankruptcy to stop the collection efforts is the best choice. The decision to file bankruptcy is one that should only be made after careful analysis and serious thought is given to your circumstances. In some instance you may be better off trying to negotiate more manageable repayment terms with your lenders, which can keep harmful bankruptcy notations off of your credit and also allow you to maintain an open line of credit with some lenders. But, if you are looking at a garnishment of your wages in order to pay a judgment creditor, the situation becomes stickier.

Just like there are pros and cons to filing bankruptcy, there are advantages and disadvantages to allowing a garnishment to remain in place on your paycheck. For example:

  • A garnishment ensures the payment is made, and that the lender is not calling you for payment. But at the same time a garnishment requires your employer to perform a complex calculation at each pay period and remit a portion of our pay to a third party. Sometimes mistakes are made, and you may end up overpaying what is due.
  • A garnishment is not noted on your credit report, but the judgment that gave rise to the creditor’s ability to garnish your wages will show up on your credit. However, the impact of having a money judgment on your credit is not as damaging as having a bankruptcy notation.
  • Garnishments are usually only for a short period of time, like 6 months, and if the lender does not renew the garnishment the withholding from your check ends when the garnishment expires. Unfortunately, not all employers are aware of this rule and will continue to hold money out of your check long after the garnishment has run its course.

Making a decision that is right for you can be done with the help of a qualified debt management and bankruptcy attorney. If you are facing financial difficulty, call us today for help.

For more information about bankruptcy, contact us at We will help by coming up with solutions that work for you.

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