## Can a Loan Company Garnish Wages for Car Payments?
When you fail to repay a loan, the lender may take legal action to collect the debt. One of the most common methods of debt collection is wage garnishment, which is a legal process that allows a creditor to take a certain percentage of the debtor’s wages each pay period until the debt is satisfied.
However, there are certain restrictions on which debts can be collected through wage garnishment. Federal law generally prohibits wage garnishment for consumer debts, which include car payments.
### Exceptions to the Rule
There are a few exceptions to this rule. For example, wage garnishment may be allowed if:
* The loan is secured by collateral, such as a car.
* The loan is a student loan.
* The loan is a tax debt.
* The loan is a child support obligation.
### Wage Garnishment for Car Loans
If you fail to make your car payments, the lender may repossess your car. However, the lender cannot garnish your wages for the debt unless the loan is secured by the car.
In most cases, car loans are secured by the car. This means that the lender has a lien on the car, which gives the lender the right to repossess the car if you default on the loan.
If your car loan is secured by the car, the lender may be able to garnish your wages for the debt if you default on the loan. However, the lender must first obtain a judgment against you in court.
### How to Stop Wage Garnishment
If your wages are being garnished, you can take steps to stop the garnishment. You can:
* **File for bankruptcy.** Bankruptcy can stop wage garnishment, but it will also affect your credit score and make it difficult to obtain credit in the future.
* **Negotiate with the creditor.** You may be able to negotiate a payment plan with the creditor that will allow you to avoid wage garnishment.
* **File a motion with the court.** You can file a motion with the court to have the garnishment stopped. The court may grant your motion if you can show that the garnishment is causing you financial hardship.
### Conclusion
Wage garnishment is a serious matter that can have a significant impact on your finances. If you are facing wage garnishment, it is important to seek legal advice to learn your options.