We’ve all been in a tight spot on occasion. The bills are coming in, but the money isn’t there immediately to pay them. We may juggle the bills, paying one thing one month and another the next, until we can catch up.
But some of us get so far behind that we can’t catch up. We turn to credit cards to help us, and then we can’t pay the credit cards, and we get buried under the outrageous interest. Trying to get a handle on debts can feel like trying to bale out a sinking ship by dumping out buckets of water. The problem is coming at you a lot faster than the solution.
If you don’t take other action, that kind of debt is going to lead to more problems for you. Creditors will start calling you constantly to try to get you to pay up. You may be able to negotiate a payment plan in some cases, but you may not have any options if the debt grows too large or the problem goes on for too long. Soon, your creditors may start to garnish your wages to get what you owe, which can be embarrassing and can cause you many more problems. How are you going to get out from under debt and start taking back your finances if your paycheck is being siphoned off?
How Creditors Garnish Wages
First, you need to understand what has to happen for creditors to take money from your paycheck. Creditors can’t just decide they want to take your wages and then tell the bank how much they want. They have to go through certain steps.
Creditors must first seek a court order to get a wage garnishment in Gilbert. They have to show how much you owe, what measures have been taking to get you to pay the debt, and other information to get the court to approve the order.
Creditors also have to ask for a specific amount to be garnished, which has its limits. What the courts will allow creditors to garnish depends on how much money you take home each week, how much money you owe and what type of debt it is, and how much you make over the federal minimum wage.
Stopping Wage Garnishment with Bankruptcy
Filing for Gilbert bankruptcy triggers what’s known as the “automatic stay,” which prohibits creditors from contacting you or continuing their collection efforts. The automatic stay goes into effect whether you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy.
While the automatic stay is in effect, the bankruptcy court will analyze your filing to determine if you should be required to pay anything to your creditors and, if so, how much. If you are granted a Chapter 7 bankruptcy discharge, your unsecured debts will likely be eradicated, such as your credit cards and personal loans. If you are granted a Chapter 13 bankruptcy discharge, you will have a debt repayment plan that is based on your ability to pay.
Before you file for bankruptcy, you should talk to an experienced bankruptcy lawyer about the right strategy for your circumstances. You must meet certain eligibility criteria to file for Chapter 7 bankruptcy, including an income limit. There will also be a limit on how much equity you can have in assets that you want to keep, such as your home, if you want to file for Chapter 7 bankruptcy.
Therefore, you should review your situation in detail to determine what kind of bankruptcy filing will bring you maximum debt relief and help you reach your financial goals.
If you are thinking of filing for bankruptcy, Gilbert Bankruptcy Lawyers can help. Our attorneys help individuals and businesses with Chapter 7 and Chapter 13 bankruptcy filings. We’ll help you understand your legal options and how they may be able to help you reach your financial goals. We may be able to help you stop debt collection efforts, put an end to wage garnishment, and stop harassing phone calls from your creditors. We may even be able to help you eliminate your debt. Call us in Gilbert today to talk with one of our experienced bankruptcy attorneys about your options.
Gilbert Bankruptcy Lawyers