Florida state law provides multiple options for creditors that are not receiving the repayment that they require from debtors or borrowers. In certain cases, creditors can go to court to pursue a judgment and then enforce that judgment by obtaining a garnishment of someone’s wages.
Wage garnishment means that a portion of someone’s paycheck goes directly to a creditor every week before the debtor receives their paycheck. Is the pursuit of wage garnishment a worthwhile endeavor for creditors dealing with recalcitrant debtors?
Wage garnishment can compel repayment
Even when creditors and lenders negotiate repayment plans with individuals who have fallen into arrears, there is never any guarantee that someone will abide by those arrangements. Wage garnishment is beneficial for businesses because it is automatic and outside of the control of someone who has previously refused to pay what they owe.
Of course, there are strict limits that apply under Florida law. At most, a creditor with a judgment that secures a wage garnishment can receive 25% of someone’s wages or whatever they receive in pay beyond 30 times the current minimum wage. The creditor will have to accept whichever of the two options amounts to less money each month. Even when an organization may only receive a few hours’ worth of wages from each paycheck, those small amounts can eventually help diminish the total balance owed. The risk of a worker quitting is noteworthy as well, but the garnishment can apply at their next job as well.
Many companies agree that receiving regular payments is better than waiting for someone to make good on their obligations or file for personal bankruptcy. Learning about the different debt collection options available for businesses in Florida can help those seeking to recover a debt choose the best option for a specific situation.