Does wage garnishment accumulate interest?

When we think of wage garnishment, we normally won’t think of the garnishment order accumulating additional interest on top of the underlying debt, but that is what happens the longer we don’t settle the debt in full. This increasing interest is something you would NOT want to have added to your underlying debt, especially if you live in a state that allows awarding the creditor with a high interest rate in the double digit figures!

Interests on wage garnishment fall into two types depending on their phase – before and after a court judgement is issued. The interest is based on the court judgement or the debt (as in the case of long running payments).

Though it may seem unfair, such interests on garnishment are fully legal, and allowed by state and federal authorities. Even if you initially owed a creditor a small sum, do realize that it can easily balloon up into a much bigger sum if you default on the debt repayment. Plus, if the creditor gets the court to issue a wage garnishment order on you, that interest may also include attorney fees and other court costs – it may sound incredulous, but it is what it is.

Thus, today’s featured article is once more an indirect reminder that debt should always be settled as soon as possible to avoid the burden and hardship that can ensure. Even if you can’t repay it off right now, you should come to an amicable solution with your creditor – e.g. staggered repayment.

This entry was posted in Garnishment and tagged , , . Bookmark the permalink.

privacy policy