Answers To Can a Payday Loan Company Garnish Your Wages

Most payday loans are advanced to borrowers that are already stuck in a debt cycle. Eventually, most will fail or struggle to repay their loans and expose themselves to the aggressive attempts of debt collection by lenders. In these cases, borrowers might wonder whether payday loan lenders have the right to garnish their wages. Here are some tidbits to answer this question for you.

Can a lender garnish your wages?

When you cannot repay your payday loans in Brampton, a lender can garnish your wages to collect it. Thankfully, it is a long process before the garnishing starts. The lender has to sue you and get a court order allowing wage garnishment. Do not assume that a lender will let you off the hook when your principal balance is small. Interest rates and penalties for payday loans accumulate quickly and can make your debt balloon into one worth pursuing.

Are there state exemptions for wage garnishment?

Some states have exemptions or limits on wage garnishing and bank accounts to ensure a borrower is left with enough to live on. Moreover, some wages cannot be garnished legally. As such, though you have defaulted on your debt repayment, you are sure some legal protection is on your side.

How much money can a lender take?

Thankfully, lenders have a limit on how much they can take from your wages. They will not be allowed to take so much that you can no longer support yourself. Lenders can only garnish 25% of your disposable income in most states.

Though your questions on wage garnishment have been answered above, there are several steps you can take to avoid wage garnishment with a payday loan. Consider getting a debt consolidation or management plan early to help you repay the loan. Moreover, be careful to only take a payday loan amount that you can comfortably repay.