If you’re facing mounting debt, a court-ordered wage garnishment usually follows. It’s an unfortunate but necessary process to help you escape debt, and you might be wondering if it impacts your credit. Increasing debt can already do a number on your credit score, and you don’t want any additional damage. Here’s what you should know about wage garnishment.

What Is Wage Garnishment?

If you have outstanding student loan debt, medical bills, or back taxes that you aren’t paying off, debt collectors and courts will begin looking for ways to make you. Wage garnishment is a common way. Once a debt collector files a complaint, courts can order that employers remove a regular amount of money from each paycheck that will be paid to the financial institution. This number can be up to 25% of your disposable earnings after deductions. As with any financial penalty, it can go on to impact your credit score.

How Does It Affect Your Credit?

Wage garnishment can potentially lower your credit score. The bank or institution that issued the loan may lower your credit score and then apply higher interest rates on the uncollected debt. Debt collectors can also report the wage garnishment to your public and financial records.

Evidence of a closed or defaulted account will also negatively affect your credit score. This information remains on your report for up to seven years, and each entry can lower your credit score by up to 150 points. If you’re facing inescapable debt, it’s time to begin exploring solutions with an attorney. If you have extra income following the wage garnishment, you need to begin paying off debts to raise your credit score.

It’s important that your rights are protected during wage garnishment. If you need assistance, attorney Harry B. Zornow in Hamilton, OH, can help. He brings over 27 years of experience in bankruptcy law and debt relief to clients and can help you find solutions to your financial problems. He’ll ensure you’re treated fairly by debt collectors and help with bankruptcy filing should you pursue the option. Explore his services further on his website, and call (513) 737-9770 to schedule a consultation.