Extra Income Is Key
Amy's bank accounts were seized last week by a loan company. She and her husband are now being garnished at 25% of their pay, and they owe $16,000. Her husband makes $55,000 a year.
QUESTION: Amy in Wichita is calling because all of her bank accounts were seized last week by a loan company. She and her husband are now being garnished at 25% of their pay, and they owe $16,000. Her husband makes $55,000 a year. Dave recommends trying to settle with the company to put this garnishment on hold.
ANSWER: There are basically three things you can do. One is you can work your way through this with this garnishment. That’s not preferable. Two is we sell some stuff around the house and try to come up with $4,000, $5,000, or $6,000, working extra jobs, going crazy for a period of time, and try to settle with them for pennies on the dollar. They often will do that. Third, you can bankrupt on it. I wouldn’t file bankruptcy on a debt this size, though. You are in a serious pinch today with four kids and them taking 25% of his check. You’ve had your bank account scarfed, so it’s thrown you into panic mode.
I hope you don’t have to struggle through this, but the first thing you do is get back on balance and open a checking account in your name so that you can operate your household again. Try not to leave anything hanging out there that they can scarf because they’re being very aggressive—unusually aggressive, honestly—but that’s certainly their right. If your husband can work nights delivering pizzas and pile up some money, you can get this settled. You’re going to have to create some extra income. It’s your only option.