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Wage Garnishment and Bankruptcy

Wage Garnishment and Bankruptcy
"""If you have ever been late on your debt payments or dealt with harassing credit collection agencies, then you are familiar with the tension associated with overwhelming debts. Some creditors may send menacing letters or even file a lawsuit against you in an attempt to obtain payment. When debt collection reaches the court system, it can be a significant nuisance and leave you with few options. Unanticipated wage garnishment is one form of court-ordered debt collection that can be extremely devastating.

The Fundamentals of the Method

In order to satisfy a debt, creditors may garnish your wages or bank account. The negative news is that your creditors could garnish up to 25% of your gross monthly income. However, the garnishment process is governed by stringent regulations. Not all debts are eligible for sequestration. Child support arrears, unpaid taxes, student loan debts, and other court-ordered penalties are the most frequent debts that can result in wage garnishment. In addition, creditors must obtain a court order before garnishing any of your wages. Before a court will sanction the order, the creditor must establish that they have made good faith attempts to collect the debt.

Managing Wage Garnishment

Despite the fact that the rules regulating wage garnishment are in place to prevent you from being inundated with unfair collections, a wage garnishment order is still difficult to manage once it has been issued. As the order is a legal matter, it may be difficult to revoke or cancel it once it has been issued. Complete debt repayment is one method to stop a wage garnishment order, but this is not always feasible.

Filing for bankruptcy is an alternative way to deal with wage garnishment. When a bankruptcy petition is filed, a stay order is automatically issued, which prohibits creditors from collecting a debt. This order is effective immediately and suspends all credit collection efforts, including garnishment orders. The advantage of the automatic stay is that it halts debt collection efforts while you develop a debt resolution plan under court supervision. A stay can release you from wage garnishment without requiring you to deal with your creditors directly. However, debts that do not qualify for bankruptcy protection may be subject to garnishment. Additionally, it is unlikely that previously garnished funds will be returned, but future funds may be protected.""

" - https://www.affordablecebu.com/
 

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"Wage Garnishment and Bankruptcy" was written by Mary under the Finance / Wealth category. It has been read 115 times and generated 0 comments. The article was created on and updated on 01 June 2023.
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