One of the main financial hurdles your company is currently facing is simply the nonpayment of outstanding debts. Perhaps you’ve provided goods or services that haven’t been paid for, even though agreements were in place. Or perhaps your company services loans, such as auto loans, and consumers are not always consistent in paying them back on time.
One potential option to consider is wage garnishment. It is important to note that this is usually done with a court order. You can’t garnish someone’s wages yourself, even though they do owe your business money. But you can go to court and show that wage garnishment is necessary, obtaining a court order that puts it into place.
When the money is removed from the borrower’s account
One of the main benefits of doing this is simply that the money is taken from the borrower’s paycheck. Their employer has to comply with the court order and withhold a portion of each paycheck.
The money that is withheld is diverted to your company to help satisfy the debt. Over time, the amount that is owed is slowly paid back, even if that borrower did not have the cash on hand to pay it all off at once.
Not only does spreading the payments out help make it affordable, but the borrower themselves doesn’t have any choice. It’s not as if they are being paid their full wages and then told to pay back the debt. They never even see the money at all, so the matter is out of their hands. As long as they are employed, they naturally begin paying back this financial obligation.
As noted above, the legal process does have to be followed, and a court order will likely be necessary. Make sure you know exactly what steps to take at this time.
