If you've been served an administrative wage garnishment notice, you need to know how to defend yourself. Read on to learn the best defenses.
Book a Consultation CallBeing in debt is never a fun experience, but it is one that most Americans are familiar with. Almost all adult Americans have some form of debt. Moreover, the type and severity of this debt vary from person to person, but it is a situation that bonds us whether we like it or not.
Administrative Wage Garnishment Notice
If you owe a debt to a government agency, such as the Small Business Administration, you might have an administrative wage garnishment notice sent to you. Garnishment is a legal remedy pursued by the government. If successful, they will be able to take a percentage of your paycheck each week before it gets to you.
How do you defend yourself against this type of scenario? Read on and we'll walk you through what you need to know about administrative wage garnishment cases.
You might owe money to a government agency for a number of reasons. For instance, you might've taken a government backed loan out, obtained federal aid, or used government backed school loans. However, the good news is that the government cannot garnish your wages without providing you with a hearing.
In the most basic terms, garnishment is the legal process in which the government requires a third party to turn over money or property that would otherwise be owed to a debtor. In this case, the government has a portion of your wages turned over to them instead of you.
Some people believe the only way to fight wage garnishment is to declare bankruptcy but this isn't true. The law affords you defenses and tactics you can employ to fight the administrative wage garnishment process.
The moment you get a garnishment notice in the mail you should move to hire an experienced attorney for your case. It can be difficult to defend yourself against this disruptive legal process, but it isn't impossible with the right help on your side.
An attorney will be able to look at the facts of your case and develop the best possible strategy. As experienced attorneys, they will know the ins and outs of the law and ensure your paperwork is filed correctly and on time.
However, you only have a very limited amount of time after you receive the notice to request a hearing.
What grounds can you object to wage garnishment?
If you've already paid all the money you owe the government via other means, you should certainly mention it when writing when your objection. The last thing you want is for the government to get more money than they are actually owed.
Also, you can argue that you don't owe the debt. You and your attorney will have to prove this fact.
A garnishment can be challenged because the amount claimed you owe is incorrect.
Further, you may also object to a garnishment based on the fact that it would cause a financial hardship.
If you file an object formally, you should hear from a government hearing officer within a few weeks about an official hearing. If you fail to timely file a hearing request, a garnishment order will be issued to your employer.
The hearing is a chance for you to present your evidence and arguments in favor of your defenses.
The hearing is usually done by "paper", that is, you do not have to personally appear. Your attorney submits a legal brief supported by documentation.
It's never fun to receive a garnishment notice in your mailbox.
If you do receive one, it's of the utmost importance that you respond quickly. The above information can help you to determine how to properly defend yourself against a garnishment notice and what next steps you need to take.
Need immediate help with your case? Give us a call anytime or chat with us online for assistance. We'll be able to provide a free case evaluation.
Millions of Dollars in SBA Debts Resolved via Offer in Compromise and Negotiated Repayment Agreements without our Clients filing for Bankruptcy or Facing Home Foreclosure
Millions of Dollars in Treasury Debts Defended Against via AWG Hearings, Treasury Offset Program Resolution, Cross-servicing Disputes, Private Collection Agency Representation, Compromise Offers and Negotiated Repayment Agreements
Our Attorneys are Authorized by the Agency Practice Act to Represent Federal Debtors Nationwide before the SBA, The SBA Office of Hearings and Appeals, the Treasury Department, and the Bureau of Fiscal Service.
Clients borrowed and personally guaranteed an SBA 7(a) loan. Clients defaulted on the SBA loan and were sued in federal district court for breach of contract. The SBA lender demanded the Client pledge several personal real estate properties as collateral to reinstate and secure the defaulted SBA loan. We were subsequently hired to intervene and aggressively defend the lawsuit. After several months of litigation, our attorneys negotiated a reinstatement of the SBA loan and a structured workout that did not involve any liens against the Client's personal real estate holdings.
Clients obtained an SBA 7(a) loan for their small business in the amount of $298,000. They pledged their primary residence and personal guarantees as direct collateral for the loan. The business failed, the lender was paid the 7(a) guaranty money and the debt was assigned to the SBA. Clients received the Official 60-Day Notice giving them a couple of options to resolve the debt balance directly with the SBA before referral to Treasury's Bureau of Fiscal Service. The risk of referral to Treasury would add nearly $95,000 to the SBA principal loan balance. With the default interest rate at 7.5%, the amount of money to pay toward interest was projected at $198,600. Clients hired the Firm with only 4 days left to respond to the 60-Day due process notice. Because the clients were not eligible for an Offer in Compromise (OIC) due to the significant equity in their home and the SBA lien encumbering it, the Firm Attorneys proposed a Structured Workout to resolve the SBA debt. After back and forth negotiations, the SBA Loan Specialist assigned to the case approved the Workout terms which prevented potential foreclosure of their home, but also saved the clients approximately $294,000 over the agreed-upon Workout term with a waiver of all contractual and statutory administrative fees, collection costs, penalties, and interest.
Client personally guaranteed an SBA 7(a) loan for $100,000 from the lender. The SBA loan went into early default in 2006 less than 12 months from disbursement. The SBA paid the 7(a) guaranty monies to the lender and subsequently acquired the deficiency balance of about $96,000, including the right to collect against the guarantor. However, the SBA sent the Official 60-Day Due Process Notice to the Client's defunct business address instead of his personal residence, which he never received. As a result, the debt was transferred to Treasury's Bureau of Fiscal Service where substantial collection fees were assessed, including accrued interest per the promissory note. Treasury eventually referred the debt to a Private Collection Agency (PCA) - Pioneer Credit Recovery, Inc. Pioneer sent a demand letter claiming a debt balance of almost $310,000 - a shocking 223% increase from the original loan amount assigned to the SBA. Client's social security disability benefits were seized through the Treasury Offset Program (TOP). Client hired the Firm to represent him as the debt continued to snowball despite seizure of his social security benefits and federal tax refunds as the involuntary payments were first applied to Treasury's collection fees, then to accrued interest with minimal allocation to the SBA principal balance.
We initially submitted a Cross-Servicing Dispute (CSD) challenging the referral of the debt to Treasury based on the defective notice sent to the defunct business address. Despite overwhelming evidence proving a violation of the Client's Due Process rights, the SBA still rejected the CSD. As a result, an Appeals Petition was filed with the SBA Office of Hearings & Appeals (OHA) Court challenging the SBA decision and its certification the debt was legally enforceable in the amount claimed. After several months of litigation before the SBA OHA Court, our Firm Attorney successfully negotiated an Offer in Compromise (OIC) Term Workout with the SBA Supervising Trial Attorney for $82,000 spread over a term of 74 months at a significantly reduced interest rate saving the Client an estimated $241,000 in Treasury collection fees, accrued interest (contract interest rate and Current Value of Funds Rate (CVFR)), and the PCA contingency fee.
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