Your first, and probably best, option is to try to reach an agreement with the creditor, preferably before the court proceeding.  The creditor cannot garnish your wages themselves without a ruling, but you will have to commit to the terms of the agreement; court can still be an option at any point.

You can file bankruptcy.  This will severely damage your credit score, but it will immediately prevent your creditor from collecting the debt that you owe.  With this option, you’re really weighing the costs and choosing the lesser of two evils.  While your creditor might be stopped in their tracks, you’ll have a tough time being approved for loans and other lines of credit in the future.

If the wage garnishment has already taken effect, and it’s too late to stop it, your last option is to file a “Claim of Exemption.”  This means that the amount being garnished will be adjusted and lessened.  You only qualify for this, though, if you can prove that the amount of money you’re left with is not sufficient enough to cover basic life necessities.  When you fill out the form to submit to the court, you’ll need thorough proof of your income and a detailed list of your necessary expenses.

One important thing to note is that you’ll want solid documentation from your creditor when your debt is finally paid off.  This can help you ensure that the account is removed from your credit report when it should be.  You can also use it to supplement any future loan or credit applications to help explain the status of your credit score and why it’s so low, as well as show that you’ve worked on turning it around.

A credit judgment means you’re being taken to court for failure to make good on an old debt.  Perhaps you were even sent to collections over this delinquent account but you ignored the warnings or were unfortunately unable to pay.  If the creditor believes they have a decent chance of receiving their money from you, the next step is to request a judgment from the court.

Unless the debt in question isn’t yours, chances are very high that the court will rule in the creditor’s favor.  You don’t even have to be present for any actual proceedings.  (If the debt really isn’t yours, then definitely attend and fight it all the way!)  Once the judgment is ruled, your credit score will drop dramatically, and it can be extremely difficult to recover until you’ve paid off the debt.

But your credit score is the least of your worries right now; it gets worse.  The common way for the court to ensure that the creditor will actually be repaid is garnish your wages.  This means a certain amount of your paycheck will be withheld from you and sent to the creditor until the debt is paid in full.  It can be embarrassing because now your employer will know your personal financial and credit information.  Worse still, it’s obviously going to become harder to pay your bills and afford even simple life necessities, especially if you’re already living paycheck to paycheck.

Once you’ve been notified of a potential judgment proceeding (or even if you think you’re at risk for that), you only have a couple options left, but it’s best to consider at least one of them.  First, you can file bankruptcy.  This will also shoot your credit score down and you’ll still have a big hole to crawl out of, but it will protect your paycheck.  Your other option is to contact a lawyer or a credit agency that can help you negotiate a payment arrangement with the creditor.  The payment plan reached with the creditor may still be a bit damaging to your paycheck, but that may be your better option if it helps you avoid a judgment.