About 6 years ago, I lost my job and was subsequently unable to continue making even minimum payments on a credit card. It was sent to collections, and I haven't been able to keep my head above water long enough to even offer a settlement. Thursday, I received notice at work that a court had issued a settlement against me and that wages are going to be garnished to the tune of 25% of my gross pay every week. I only have 2 weeks to respond, and that's not enough time for me to come up with enough money to offer a settlement to the collection agency. I have several questions, actually: 1. Will they settle for less now that a judgement has been issued? 2. If the original debt was about $2,000 at most, and the judgement is for $7,600, a) is that legal? b) how much should I offer them? 3) If they do accept a settlement will they take payments or do I have to come up with the full amount all at once right away? 4) Seeing as how all of this is most likely going to take a lot longer than 2 weeks, should I contact the court first to contest the garnishment? Or the collection agency's lawyer? Or the collection agency?

The settlement agreement can be anything you and the company can agree to. Be sure to get the agreement in writing and signed before making any payments... as far as making payments on settlement agreements most companies will only agree to settle if you can pay them the settlement amount in full. They aren't going to accept payments on a lower amount when you can't pay the higher amount.

>>> If the original debt was about $2,000 at most, and the judgement is for $7,600, a) is that legal? <<<

Unfortunately, it seem so. Amazing how if you, a regular person, loans another person money and tries to do that it's called "usery" and is illegal. But it's OK for a big company to do it just because they have billions of dollars in their bank account.

You should look into consulting with an attorney to help you out... they may cost some money but can also help you save a lot of money and also get your garnishment lifted.

Good luck!

Were you served with court papers to appear in court? They can not have a legal garnishment unless they already had a jdugement against you.

But once they get a judgement, and a garnishment, why should they settle for less, they can just take 1/4 of your pay till they get everything, before it went to judgement was when to settle with them.

A 2000 loan out 5 years normally would settle for about 500 dollars before they get a judgement

Yes 2000, with 6 years of late fees, attorney fees, court fees, yes 7600 sounds about right

If they have a legal judgement and a garnishment and garnishment is allowed in your state, there is no way to stop it besides a bankrutpcy

I was served a summons that had expired a month previously. According to the garnishment writ, the judgement was reached a month before the summons expired.
I also just saw for the first time, a Proof of Service document in which a process server claims to have personally delivered the summons to me at my home in March. In the Acknowledgement of Service section, he jotted an inaccurate description of me and stated that I declined to sign. I knew the process server was lying, because no one personally served me anything, just shoved it in my mailbox 2 months too late, so I checked the date and time he allegedly served me and, sure enough, I was at work.
I know the process server lied, on a certified document filed with the court, and I can prove it with a printout of my time clock punches. Could this be enough to overturn the default judgement and allow me to renegotiate a new settlement with the collections agency - one that I can afford? Is this enough for me to file an objection to the garnishment? Is this enough for me to have the process server's job? And I mean literally have his job? I'm sure he makes more than I do, so if I had his job I would be able to pay this debt without worrying about how I'm going to buy groceries and pay the dentist and keep the heat turned on.
I guess the underlying logic in garnishing somebody who brings home $1,000 per month is that if my teeth fall out or I freeze to death, I don't need to eat, so why not take the food out of my mouth?

First of all what state are you in? You have to check with your state laws on what's considered exempt from garnishment, I am not a lawyer so maybe someone else can answer you as far as whether you can fight the judgment due to you weren't served properly. If you are in a state with legal aid, I would look into that. I know in Florida that if you are head of household the first $500.00 weekly is exempt from garnishment. You really need to try and get some legal help. Do your research and find out more about your states laws as far as judgments, garnishments and the like. I also would recommend if you have a bank account that until this is all settled that you avoid putting money in there. Hope this helps you.

Michigan follows federal exemption guidelines, which, to my understanding, allows me to keep (30 x $5.85=) $175.50 or 75% of my disposable income per week.
I'm still a bit sketchy on the term "disposable income," though. I found this: "...what is left after deductions for taxes, Social Security, normal retirement contributions, group health and life insurance premiums, and union dues."
Does "health insurance premiums" include dental insurance premiums? If so, I'm getting gouged.

I just thought of something. If they're already garnishing 25% and the rest of my check is direct-deposited into my checking account, can they legally seize that, thereby taking 100% of my earnings? The account doesn't accrue interest, and the funds don't come from any source other than my wages.

Absolutely, stop your direct Deposit ASAP. In Florida my wages that are in my bank account are exempt from garnishment for 6 months, however they can freeze my account and make me work to get it unfrozen. In the meantime I have no money to feed my kids. Anyway STOP THE DIRECT DEPOSIT NOW...