We are in the process of a voluntary repossession of one of our vehicles. The lender is attempting to force us into renegotiating the loan threatening that they will sue us and garnish wages if we don’t comply. I am prepared to cooperate and come to an agreement but I want to make sure I know my rights and the consequences before entering into these negotiations. I am basing my knowledge off 2 experiences I have seen with friends or family: My brother in law had a repossession that he did not cooperate with and did not comply with any requests or offer to negotiate and they sued him and garnished $100/wk from his pay. My best friend turned her car in they auctioned it and then they told her she owed the remaining balance and she told them she could pay $100/mth and they agreed with no further legal action. I would obviously prefer the latter scenario. What are my rights if any? Can they garnish both my husband and my own wages (we are both on the loan) if we have a dependent child in our home? How do they determine the amount that is garnished?
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In Florida, judgment creditors are able to garnish wages of judgment debtors. However, if you are eligible to file Chapter 7 bankruptcy, you may be able to avoid liability for any deficiency.
Before you take any action or make any decisions, you should speak to an attorney who is knowledgable in debt collection and bankruptcy law. The National Association of Consumer Advocates (NACA) is a non-profit consumer advocacy organization. NACA maintains a web site at www.naca.net where it lists geographically consumer law attorneys all over the US. If you don't already have an attorney, please look there for someone in your area who can help you.
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Florida law does provide for the ability for a judgment creditor to garnish wages. However, there are exemptions that can be claimed to prevent garnishment in certain situations. Fl. Stat. 222.11 provides that the wages of a "head of a family" cannot be garnished at all if their disposable earnings are less than $500/week, and if the earnings are more than $500/week, garnishment is only possible if the debtor has agreed in writing. The "head of a family" is defined as the person providing more than 1/2 the support of a child or other dependent. As applied to your situation, a judgment against both you and your husband will allow the creditor to garnish the one who earns less per week.
In any event, at a minimum, you must be left with 30 times the federal minimum wage per week after garnishment (see Consumer Credit Protection Act, 15 U.S.C. s. 1673). The maximum they can take is 25% of disposable earnings (earnings after legally required deductions).
BTW, re-negotiating the loan creates a new contract, extending their ability to sue you if you default under the new contract.
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