Steps to Take When Your Bank Account is Garnished
Creditors will take a number of measures to collect on what you owe. You will receive a number of notices in the mail, and you will be called repeatedly by representatives. Eventually, the creditor will start levying fines, and then it will start looking at legal ways to collect your debt. One way that your creditor might try to collect on what you owe is to seek wage garnishment.
Ideally, you would take steps before wage garnishment goes into effect. You may be able to negotiate a settlement with your creditor or set up a payment plan. However, if you are not able to pay at all, you may talk to a Gilbert bankruptcy attorney about your options for debt relief. You may be able to get your debt discharged through a Chapter 7 bankruptcy, or you may be able to get it restructured in a repayment plan that you can actually afford.
Before creditor starts garnishing your wages, it has to file a lawsuit against you. You will receive notice that this is happening, and you will have the opportunity to reply to the lawsuit and to participate in the process. This is not the time to bury your head in the sand and hope the whole thing goes away. It won’t.
Work with a lawyer to fight the process if you can afford it. If not, hire a bankruptcy lawyer in Gilbert to explore your options for debt relief. Filing for bankruptcy can put an end to any legal action being taken against you – at least until the bankruptcy is resolved.
Writ of Garnishment
If a creditor wins a judgement against you, the court will issue a Writ of Garnishment. This is a legal document that the creditor will give to your bank or your employer. Your bank will freeze money in your account as soon as this is received. If you know it is coming, you can try to be quicker than your creditor and withdraw that money before the writ is filed. You should focus on accounts that you share or supervise, such as accounts for your children.
Claim of Exemption
If you want to stop your bank account or wages from being garnished, you will need to file a Claim of Exemption within 10 days of the Writ of Garnishment being filed. The claim tells the court that money in your account is exempt and should not be garnished. Funds that would qualify as exempt include things like social security disability income and child support.
Ideally, you would have a separate account for these funds so that you could easily show what funds came from what sources. However, you can get an Gilbert bankruptcy attorney to work with you on filing the Claim of Exemption to increase your chances of success. You may also consider filing for bankruptcy before the funds are transferred, which may put a stop to the transfer or help you get back money shortly after it is transferred.
Protecting against Future Levies
There are a few ways you can protect against additional levies or wage garnishments for this or future debts. You can hire a lawyer and fight the civil case, which you may not win if you actually owe the money. You can try to negotiate with the creditor directly to settle your debt, possibly even lowering it.
However, the most effective way to deal with levies and wage garnishments is to file for bankruptcy. Filing for bankruptcy will give you long-term debt relief. As soon as you file, it will trigger an automatic stay, which will put a stop to any legal action being taken against you, including wage garnishments and bank levies.
Contact Gilbert Bankruptcy Lawyers today to learn more about how filing for bankruptcy may help you get the debt relief you need. An experienced bankruptcy attorney from our team will review your finances and talk over your goals with you to help you understand the best strategy. We represent clients in both Chapter 7 bankruptcy and Chapter 13 bankruptcy. We also represent business clients who are seeking protection through bankruptcy. Call us in Gilbert today to talk with a bankruptcy lawyer about your options.