Can a Payday Lender Garnish Your Wages?

Wage Garnishment: Why It Is a Concern

When someone is debt-trapped by failing to pay back a payday loan, the idea of wage garnishment scares him to the core. Wage garnishment is a legal procedure where the court askes the employer of the borrower who has defaulted the loan to cut down a certain amount of his salary. To meet the total amount of debt- including interest, this process continues for several months. Before the debt is paid off, the employer cannot fire the borrower for any other reason apart from work-related issues. Without a doubt, no one would like his paycheck to get reduced, but this is a legal process. Now the question is, can your payday lender garnish your wages whenever it wants or only in specific cases this is possible? We could refer to the Federal Trade Commission (FTC) to answer this.

When a Lender Can Garnish Borrower’s Wages

According to the Federal Trade Commission, wages can be garnished to address any kind of delinquency occurred with loan repayments. However, that can only be done legally. Such a situation only arises when two conditions are met. Firstly, the payday lender must be recognized by the state, and secondly, the court, on the request of this recognized lender, needs to order the employer to garnish the borrower’s wages. Therefore, if the lender is not registered, or it hasn’t gotten the court’s order, cannot approach the employer directly for wage garnishment. If it does so, it would be considered illegal. Without a court order, even a registered lender cannot ask the employer the same. However, if the lender gets the court’s approval, it is very difficult to avoid garnishment for the borrower. The only possible way to avoid salary garnishment could be to challenge it with legal measures.