Imagine that you receive your paycheck for the week and it is $150 less than what you normally take home each week. Maybe you stop on the way home to purchase gas but your debit card is declined and once you get home, you discover that a judgment creditor seized the money in your bank account. This happens to individuals every day who are working hard and trying their best to pay their debts while providing for their families. If your wages have been garnished or you have received a letter from a creditor that your bank account will be seized, you can prevent this from happening by filing a bankruptcy.
What is a garnishment?
Wage and bank garnishments permit creditors to collect money owed to them because of a judgment. If you are sued by a creditor and it obtains a judgment, your wages and bank accounts are in danger of a garnishment order. After the creditor obtains a judgment, it only needs to wait 21 days until it can request a Writ of Garnishment from the court. In most cases, you may not be aware of a garnishment until your bank account is overdrawn or your paycheck is lower than you expected. This leaves you with no money to pay your mortgage, rent, car payments or put food on the table but there is a way to stop garnishments – - filing for bankruptcy relief.
How much can a creditor take through wage and bank garnishments?
A creditor is permitted to garnish up to 25% of your income after taxes and social security to pay the debt. This is a substantial amount of income for most individuals. Bank garnishments are unlimited – - creditors can take everything in your bank accounts and credit union accounts to satisfy the judgment. A creditor can even seize your entire state tax refund to pay the debt. It is disheartening to see families who are waiting on their tax refund to catch up bills or make repairs lose their entire tax refund to a judgment creditor. However, you can stop garnishments by contacting a Michigan bankruptcy attorney to file a bankruptcy case.
How can a bankruptcy stop wage and bank garnishments?
Stopping wage garnishments begins with meeting with a Michigan bankruptcy attorney. When you file a bankruptcy case, an immediate automatic stay goes into effect barring creditors from continuing collection efforts. This includes, but is not limited to, wage and bank garnishments. The automatic stay prevents the judgment creditor from garnishing your wages and bank accounts for the duration of your bankruptcy case.
Wipe out judgment debt with a bankruptcy discharge
When you file a Chapter 7 bankruptcy, the debt represented by the judgment will be discharged; therefore, the creditor will be unable to resume wage garnishments when your bankruptcy case is closed. Unfortunately, most taxes are non-dischargeable (although there are exceptions to this general rule) so the IRS could resume garnishment unless you file a Chapter 13 bankruptcy case. By filing a Chapter 13 bankruptcy, you will be able to stretch out your tax debt over a 3 to 5-year bankruptcy plan and pay the tax debt at zero percent interest. For many individuals, this is a much better way of solving their tax problems than dealing directly with the IRS.
Act quickly to stop wage and bank garnishments, keep your money and even recover your money
Bankruptcy immediately stops garnishments and, in some cases, may even help you recover money that has already been seized. However, you must act quickly. Timing is important when trying to prevent or stop wage and bank garnishments. Even though some of your income or assets may be exempt from garnishment, only an experienced bankruptcy attorney can advise you of your rights. It is important to act quickly to prevent garnishments and recover some of the money that has already been taken by judgment creditors.
Attorney Gene F. Turnwald understands how difficult it is to make ends meet when you are struggling with debts that you cannot pay. Let our office help you find an affordable solution to your debt problems. We offer free consultations so that we can answer bankruptcy questions and provide skilled advice on your unique financial situation.
Do not let a judgment creditor take your hard-earned money through a wage garnishment or a bank garnishment. Contact The Law Office of Gene F. Turnwald at (517) 347-6700 or firstname.lastname@example.org to schedule your free bankruptcy consultation today. Stop garnishments before they begin by filing a bankruptcy case.