There are numerous avenues available to creditors to collect unpaid debt. One of those options if for them to apply for wage garnishment. This means that a percentage of your earnings is taken straight out of your salary and paid to the creditor. This percentage can be quite high, and it can cause significant hardship as well. If this is the case with you, then you may want to consider writing a hardship letter.
Basic Tips for Writing a Hardship Letter Wage Garnishment
This type of letter must be formal, which means it should be typed out, addressed to the right person, in the correct format, and free from spelling and grammatical errors. It should also, in the subject line, include an account number of the debt that is owed, if you have it.
State Your Request
Start your letter by explaining what you are requesting. This would be a cessation of the actions that are currently being taken in order to recover your debt. State that you are in the process of developing a payment plan, which you should attach to the letter. Explin that, while you understand that wage garnishment is an option for the creditor, it would be extremely detrimental not just to you, but also to members of your family.
Provide Details of Your Income and Expenditures
Before you write the letter, you should have prepared a statement of your income and all your expenditures. It should state how much of your income goes to necessary bills, and how much you have left. This statement should be included in your letter. You should also make it clear that you financially support other members of your family, and that the vast majority of your income goes to certain bills, leaving you with a certain amount each month for nonessential expenses. Thus, if a wage garnishment is applied, you would be left with virtually nothing towards the nonessential expenses, and that this could lead to you being declared bankrupt. Do not be afraid to state that bankruptcy would mean that your creditor will not receive any money at all. However, make sure that you don’t state this in a threatening way. After all, it is not their fault that you are in financial difficulties, and you are asking them to do you a favor.
Indicate Your Suggested Debt Repayment Plan
State in your letter that you are aware of the fact that you are not able to keep up with debt payments on your current income but you are doing something to increase it. Make a suggestion for a debt repayment plan and when you expect this to start. Indicate that you are looking forward to hearing back from them as soon as possible.
Make sure you include copies of every relevant document with your letter. Do also keep copies for yourself, and send the letter via registered mail. If you have not heard back from them within one week of your letter being received, make sure to follow up. It is your responsibility to take action if you want to avoid wage garnishment, after all.
Hardship Letter Wage Garnishment Example
{Your Name}
{Your Address}
{Your Phone #}
{Date}
To Whom It May Concern:
I am writing this hardship letter to request a cessation to the actions being pursued by your company in regards to my debt. I am working to create a payment plan that we could agree on, but wage garnishment is extremely detrimental to my current family and financial situation.
I am including a worksheet of my income and how it is distributed to necessary bills. As you can see, I am the sole supporter of a {number} person family. Most of my paycheck goes toward {mortgage, rent, hospital bills, be specific}. This leaves me with {amount} leftover every month for nonessential expenses. If my wages are garnished then this will only further my difficulties and may lead to bankruptcy. If that were the case, I cannot imagine that I will ever be able to repay the charges.
I understand that the current disposable income amount that I have is not enough to keep up with my debt. Therefore I have also included a worksheet detailing a possible debt payment plan that might work for both of us. Please contact me as soon as possible so that we can work something out.
Thank you for your time and consideration.
Sincerely,
{Sender Name}