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I Was Scared With Wage Garnishment and Paid Again a Debt I Previous Settled

By on September 4, 2014

“Dear Steve,

I used to have various payday loans back in 2009-2010 that I settled through a company but somehow back in April of this year, I received a called from my HR Department to let me know that my salary was about to be garnished by an agency because I had a balance of $600; even though I requested proof of this debt, I never got one, instead they kept calling at my work place so I paid up; by the way, I am still waiting for “I owe nothing receipt” so I am afraid another company may claim this.

What should I do?

Eileen”

Dear Eileen,

Your concerns are valid and at this point it seems you should immediately gather the data necessary and put it with your other very important papers you keep.

Specifically, you should ask the HR department for a copy of the notice they received which identifies the party requesting the garnishment. You should also get a copy of some document that shows you paid the money. Preferably this would be a copy of a cancelled check that shows it was cashed or a bank statement or credit card statement showing it was paid. If you sent the payment through some traceable means like trackable delivery, keep a copy of that tracking documentation. And you should absolutely keep any proof or evidence you paid or settled the other debts in the same place. Without that proof you may have to pay them all over again if they come calling.

The problem here is there is no way to determine if this was ever a valid debt or if they actually had valid authority to garnish your wages. To be garnished you would have been sued but you have no apparent recollection of being sued.

You should contact the Clerk of the Court in the county or parish you live in and ask them if there are or were any cases filed against you. If there are and they wound up as a default judgment because you never fought them then we need to make sure the money you paid was actually recorded as satisfying the judgment against you, if any. Otherwise all that is happened is you paid $600 and a valid judgment might sill be open against you.

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I’m afraid what you are left with here is more homework than definitive answers but there are so many potential problems here. For example, there are a whole range of scammers who call people on old payday loans that are paid or settled and claim money is due. They scare them into paying money that was never owed. Is that what happened here?

I can understand why they would not verify the debt when requested. It might be because it was never a valid debt or because if you had actually been sued and lost through a default judgment the only way I think to unwind that would be to fight the original case against you.

For anyone who wants to know how to validate a debt, see this and this.

If you wanted to see if that original case against you could be nullified for something like improper service and you could get your money back then I can’t stress enough how valuable and imperative it would be to pay a local attorney who is licensed in your state and who has experience with consumer debt issues. You could look at NACA.net for such an attorney.

I realize you would have to pay the attorney but you are out the $600 anyway and if they could recover that money and address the potential lawsuit against you it would be found money well spent.

Please post your responses and follow-up messages to me on this in the comments section below.

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About Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

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