By having a garnishment on your salary, can you claim a personal loan? In theory, yes. Indeed, even if some creditors take the sums necessary to repay a debt directly from your salary, you can apply for a loan through traditional financial institutions. There are guaranteed payday loans however some blocking exceptions, but also conditions to be fulfilled in order to facilitate obtaining a positive response. Here is the detail of the information to know.
The principle of wage garnishment and the personal loan application
A wage garnishment occurs following a court decision that allows a deduction at source for a creditor, who wishes to be reimbursed for a debt contracted by the borrower. Depending on the income of the past year, a maximum seizable amount is determined. This is a fraction of the monthly salary, the share of which increases with income. Thus, on income below 310.83 euros per month, only 1/20 of this amount can be entered.
Then, between 310.83 euros and 606.67 euros per month, we then go to 1/10 of seizable shares. It is necessary to go up to a monthly remuneration higher than 1799.17 euros per month so that the totality of the income beyond can be taken as part of a wage garnishment.
It is possible to obtain a new loan to carry out a project or to pay off outstanding debts, or even to carry out a loan consolidation operation, that is to say, to combine several outstanding debts into a single new loan, and thus put an end, if possible, to the garnishment of wages. While in general a garnishment of wages is not incompatible with the granting of a new loan, there are special cases. To know if you can apply for a new loan from a bank, it is important to know the nature of the current seizure of your remuneration.
If you h ave to repay an unpaid credit and a wage garnishment is put in place, then this means that you are the subject of a file with issuing authority. Impossible then to intervene to help you obtain a credit or even a repurchase of credit, unless offering a strong guarantee, like the contribution of a real estate as mortgage guarantee.
Garnishment of wages due to a tax problem
The public treasury can very well use the garnishment of wages in order to obtain the payment of an unpaid tax. With a schedule often negotiated directly with the tax authorities, you can pay late taxes at your own pace. This type of entry does not prevent you from applying for a loan.
Garnishment of wages due to unpaid rents
If you have not honored your last rents, it is possible for property owners to directly request a garnishment of your salary. This is not a eliminatory criterion for obtaining a credit, but it is obvious that if the amount claimed is large, it will represent a negative point.
In the context of a divorce, one spouse may have to pay financial compensation to the other spouse who has obtained custody of the children. The garnishment of wages is a means sometimes used by judges to ensure the payment of the necessary funds. Again, this is not a sticking point in obtaining credit.
Always explain the origin of your wage garnishment, and do not lie about the amounts actually taken each month. For example, provide your latest account statements so that your interlocutor can understand the nature of the debt reimbursed via the garnishment of salary. Indicate the date on which this entry will end. If the remaining repayment period is short enough, then you are much more likely to get a positive response.
Finally, if you can, try to provide strong guarantees to reassure the bank and limit its risk-taking. By having real estate that you can place as a mortgage guarantee, you will reassure the credit organization. You can also call on a co-borrower, who will become jointly responsible for your debt in the event of a problem.
Rachel Dixon works on travel and features at Daily Mid Time