Can a Personal Loan Be Garnished?
Personal loans are a great way to get access to the money you need to cover unexpected expenses or make a large purchase. But if you’re not able to make your payments, you may be wondering if your loan can be garnished. The answer is yes, it is possible for a personal loan to be garnished.
Most garnishments are judgments for consumer debt. These include debts from credit cards, doctor bills, hospital bills, utility bills, phone bills, personal loans from a bank or credit union, debts owed to a landlord or former landlord, or any other debt for personal, family, or household purposes.
If you’ve taken out a personal loan and are unable to make your payments, the lender may take legal action to recover the money. This could include filing a lawsuit and obtaining a judgment against you. If the lender obtains a judgment, they can then file a garnishment order with the court. This order will require your employer to withhold a portion of your wages and send it to the lender.
In some cases, the lender may also be able to garnish your bank account. This means that they can take money directly from your bank account to cover the debt. This type of garnishment is called a bank levy.
It’s important to note that not all states allow wage garnishment. Some states have laws that limit the amount of money that can be taken from your wages. In addition, some states may exempt certain types of income from garnishment, such as Social Security benefits.
If you’re struggling to make your loan payments, it’s important to take action before the lender takes legal action. You may be able to negotiate a payment plan or other arrangements with the lender. You can also consider consolidating your debt or refinancing your loan.
If you’re facing a garnishment, it’s important to seek legal advice. An attorney can help you understand your rights and options. In some cases, you may be able to challenge the garnishment or negotiate a settlement with the lender.
No one wants to face the possibility of having their wages or bank account garnished. But if you’ve taken out a personal loan and are unable to make your payments, it’s important to understand that it is possible for the loan to be garnished. If you’re facing a garnishment, it’s important to seek legal advice to understand your rights and options.