Q: My wife has had a wage garnishment made against her for a debt she knowingly owes of about $4,000.

An independent company (an ambulance chaser of sorts) bought her debt from the bank and allegedly sent her a letter for court which we never got. She then got a letter saying her company is now going to remove 25 percent of her already small check for the garnishment.

We have tried to talk to the lawyers of the collection company to see if we can possibly lower it from 25 percent to maybe 15 percent or 10 percent of her paycheck.

We live paycheck to paycheck and simply can’t afford a reduction in her pay of 25 percent. If we have to pay it, we will certainly have to stop making other payments, including our mortgage and real estate property taxes.

We told this to the creditor, but they declined to change the agreement and want this huge percentage of her paycheck. What can we do?

A: The legal system has a certain process that all parties must pay attention to, or risk winding up in a less than desirable situation.

A creditor generally sues a debtor when that debtor has failed to make payment on a debt. If the creditor wins the suit, the creditor obtains a judgment and has the right to collect on that judgment. Depending on the debtor’s assets, the creditor can try to go after a home, car, bank accounts or wages.

In many instances a creditor can sell the judgment it obtained to a different party and that subsequent party can use all the same tactics to collect the debt.

You can try to settle the debt as a whole with the new creditor but if they won’t go for a lower payment off your paycheck, your only choice may be to file for bankruptcy.

In some bankruptcy cases, the court would evaluate the debts and the assets a person has and would then determine whether to discharge (eliminate) any existing debts. You can talk to a bankruptcy attorney to see what your options might be, what the cost of bankruptcy will be and then make a determination as to whether you can and should file for bankruptcy.

If you find out that bankruptcy would benefit you and you could wipe out your prior debts, including the debt to this creditor, you may be able to use that information and try to negotiate a better settlement.

The threat that the $4,000 debt might be wiped out could force the creditor to settle with you for something other than a 25 percent wage garnishment. On the other hand, if the creditor refuses to offer something more financially palatable, you might have to file for bankruptcy, which will cost you a fair sum.

You should probably talk to a bankruptcy attorney to find out more about the costs and time requirements for filing for bankruptcy. In the meantime, you’ll have to figure out how to live on less income.

One final issue: If you truly never received notice of a lawsuit against you to collect on the amount you owe, you might talk to an attorney about that issue. If the creditor cut corners and did not proceed to collect the debt properly, you might be able to use that information against the creditor that now is garnishing your wife’s wages.