How to Deal With a Wage Garnishment in Oregon (or most any state!)

If you think it is hard to make ends meet now, what would you do if you had 25% of your paycheck taken as a result of a garnishment?

22853064975_8c547f714f_m.jpgBefore I show you how to deal with a wage garnishment here in Oregon (or for most any state), let's get some things straight:

THIS GARNISHMENT DIDN'T JUST HAPPEN!

I can't tell you how many times one of our clients calls to tell us that a debt collector or creditor just garnished their paycheck and they had no idea it would be happening.

OK, I know that in some VERY RARE CASES, they may have not received or seen the SUMMONS that came in person or by registered mail, but in most cases, they got it, but just ignored it.

Brief review of the collection process and how this happened:

If you find yourself in a very difficult financial situations due to a number of things, such as:

  • Loss of employment
  • Divorce
  • Death of spouse or partner
  • Illness or disability
  • Too little income after retirement

...and, you simply cannot keep up with the minimum payments required by your creditors, here's what usually happens:

When you miss a scheduled payment, you may get a phone call or letter.

If you don't reply or miss another, you ABSOLUTELY will get a phone call or letter....lots of em'!!!

(I'll show you how to ultimately put a stop to these calls later, but for now, let's keep moving through the process that could lead to a WAGE GARNISHMENT.)

The creditors wants to do whatever they can to get you to start making payments again.

You may get a letter offering to "bring your account current if you make "such-n-such" payment by a certain date.

Or, they may say to call them to look into a "Hardship Program" (which I really don't like).

But if you just can't afford any payment after paying  rent, utilities and buying groceries, WHAT NOW?

In most cases, the original will CHARGE OFF the balance of the debt you owe them.

This means that they are going to report to the 3 major credit bureaus:

  • Experian
  • Equifax
  • TransUnion

...that they didn't pay them back as promised and they have lost a lot of money!

Your account will most likely be transferred or sold to a debt collection agency.  This may even be a Law Firm that only deals with debt collection.

Now, you start getting calls and letters from the debt collector, but the good news is that now, you can LEGALLY STOP THE CALLS.

As long as your account was with the original creditor, they had the right to call you about your account.

But, once that account is charged off and placed with a collection agency, you have the right, according to the Fair Debt Collection Practices Act, to demand that they stop calling you. 

The letters will continue, but the annoying, and sometimes HARASSING phone calls will stop.  Here's how you do it:

STOP Collection Calls Free Sample Letter

But, just because they have stopped calling doesn't mean that they have stopped trying to collect!

If they cannot get you to start making payments to them (they may even offer a reduction in the balance...called a SETTLEMENT) then they may decide to FILE A CLAIM against you in your county's courthouse.

The debt collector's CLAIM say that you have not fulfilled the promise to repay this debt and they are going to seek legal action against you....sue you!

You will get a SUMMONS, and it will state all of the above and it will state that you have 20-30 days (varies by state) in order to give an ANSWER.

OK, lots of "big words" there, so let me give a simple definition:

SETTLEMENT  

This is when the creditor and/or the debt collector agrees to a substantial reduction of the balance to settle this account, once and for all.

If your interested, here's some actual examples of settlements we have negotiated for some of our clients:

Recent Settlements See what we have  done for our clients!

CLAIM   

The Debt Collector or in some cases the original creditor files a claim in court that you owe them money. When this happens, you get "served" a SUMMONS.

 

SUMMONS

The summons names you as a DEFENDANT and the Creditor or Debt Collector is the Plaintiff.  They have "claimed" that you owe this debt unless you can prove it, and I mean, absolutely prove it with copies of canceled checks, etc.

 

ANSWER

If you know, for certain AND CAN PROVE IT....FOR CERTAIN, then you have the legal right to file AN ANSWER with the court.  Not only does it cost you a FILING FEE (I believe it is about $165 here in Oregon), it has to be legally correct. 

In other words, you may think about hiring an attorney to prepare the ANSWER. And, of course, that costs more money!

But, IN MOST CASES, you really do owe the money, so giving an "ANSWER" is not necessary.

So, NOW WHAT?????

If you cannot negotiate a settlement or arrange a repayment agreement, the Plaintiff (debt collector), may decide to just go forward with a court date in order to be awarded a JUDGMENT.

Once the JUDGMENT has been awarded to the Plaintiff, they can apply for a WRIT OF GARNISHMENT.

This Writ of Garnishment is sent to your employer and your employer has no choice but to honor it.  This means that they are going to withhold (after all of the other withholdings) another 25% of your net, take-home paycheck!

So you see, this garnishment didn't just happen....there was a long process and it could have been stopped numerous times along the way!

What too many people do when they finds themselves in a terrible, financial hardship is to "hide their head in the sand" rather than seek numerous solutions.

Believe me, the last thing most creditors what to do is to have to spend the time and money to file a claim, follow up with calls and letters to you, and possibly spend more money in setting a court date, paying an attorney to represent them, etc.

Last week, we had a client call us to say that she had neglected to act on a summons she had received and the creditor (plaintiff) had been awarded the judgment....acted on the judgment....and her HR department sent her a message that her check would be garnished about $500!

We were able to contact the attorney for the collector and negotiate a repayment plan (you rarely get much, if any of a reduction/settlement after a judgment has been awarded) whereby our client agreed to pay only $200 per month until the balance was paid.

She could not handle the loss of $500, but she could make $200 work.

FINALLY....

Here in Oregon (or in any state for that matter), the best way to deal with a garnishment is to not let it get to that state.

But, if it has, then you may be able to get a reasonable repayment agreement in place.

If you need help or guidance, let us know:

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Tags: debts, oregon wage garnishment, debt collector, debt settlement, summons, hardship plans

I've Been Garnished...What Can I Do?

Wage garnishment or a bank levy is a terrible situation to be in.  If you've been garnished, here are some things you can do to stop the garnishment:

We get calls each week from someone (we are in the Portland, Oregon area) that has been garnished or has been notified by their payroll office that they are going to be garnished.

As if things were not bad enough all ready, WHAT CAN YOU DO NOW?

 

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Just to lay some groundwork...

A WAGE GARNISHMENT can only occur AFTER A JUDGMENT has been awarded to the plaintiff.

A lot of people are mistaken in thinking that just because one of your credit accounts has been charged off and assigned or sold to a collection agency, that they can come after your property.

THAT IS JUST NOT TRUE!

FIRST....

When you get behind on paying your credit accounts on time, there is a sequence of events or a time line that must take place.

You will get calls and/or letters from the original creditor trying to find out what's going on.  By-the-way, as long as your account is still with the original creditor, you can't do anything to stop them from calling.

But, once that account is charged off and transferred or sold to a debt collector, you can.  I show you how later.

NEXT...

Once the account is placed with a debt collector, you will start getting calls and/or letters from them.

If you have some funds and/or a little money left over to make a reasonable monthly payment, you may want to discuss this with the debt collector rather than just ignoring the calls.

You may be able to work out a SETTLEMENT, which is a reduction of the balance.

This settlement may have to be in a LUMP SUM or possibly in SEVERAL PAYMENTS.

To get an idea of what a SETTLEMENT AGREEMENT  looks like, click on the button:

Recent Settlements See what we have  done for our clients!

But, if you do not have any additional funds and are sick and tired of the relentless calls, you can put a stop to it now:

STOP Collection Calls Free Sample Letter

If you cannot afford anything to put towards the debt you owe, and you are not taking their calls or responding to their letters, the debt collector may decide to FILE A CLAIM.

An attorney is retained to file the claim in your county's courthouse.

Once the claim is filed, you will receive a SUMMONS.  Although this can be a frightening experience, DON'T PANIC!

The summons will state that you the claim against you (you are the defendant) by the creditor or debt collector (this is the PLAINTIFF).

It will also state that if you want to contest the claim, ( called give an ANSWER), you must do so within a short time period (usually 20-30 days after receiving the summons).

If you can prove that you do not owe the debt, then you should give an answer to the court within the time specified. 

This costs a hundred dollars or more and must be in the correct legal documentation, so you may need an attorney also

RECAP.....

  • You could not keep up with the payments due on some or all of your accounts. This may be due to a number of circumstances, but here you are.
  • You can not work out a reasonable repayment plan or settlement with the original creditor, so you account is assigned or sold to a debt collector.
  • You cannot afford a settlement with the debt collector and the debt collector files a claim and you receive a summons.

NOW WHAT??????

Most of the time the plaintiff will be awarded a DEFAULT JUDGMENT by the court.

Once the JUDGMENT has been entered, the plaintiff has the option of seeking a WRIT OF GARNISHMENT to get back what is now owed.

Additional interest, fees and court costs have now been awarded to the plaintiff as well!

If you are employed and receive a check (W-2 wages), then the writ of garnishment is presented to your employer and/or payroll department.

You may be notified, but you may just be shocked to see that your payroll check has been reduced by 25%!

(I'll give you some advice on what you may be able to do about this in a minute.)

If you receive income from commission or what is reported for tax purposes as 1099 INCOME, then the plaintiff may seek to get a bank levy on ONE OR ALL OF YOUR BANK ACCOUNTS!

This can really be DEVASTATING!

We have had people call us after their bank account(s) were depleted and they could not by groceries, pay rent, etc.!

The laws of your state (I am in Oregon and most of my clients reside here) will allow numerous EXEMPTIONS to wage garnishment and/or a bank levy.

Here are some of the "basic" exemptions (I give you a link to a more detailed list below):

  • Exempt wages....If you earn less than $1,000 a month, most likely this is exempt.
  • All Social Security Income
  • Retirement Income (very important information below)
  • VA benefits
  • Any Public Assistance (welfare)
  • Unemployment benefits
  • Disability benefits
  • Worker's compensation benefits
  • Spousal or child support or any other support you receive for you or your dependents.
  • Many "property" exemptions.

 

If you live in Oregon, you can get detailed information here:

Basic Exemptions from Wage Garnishments or Bank Levies

If you are retired and receive income from your 401(K), IRA, Pension, etc. as well as Social Security, those incomes are exempt from garnishment or levy, BUT BE AWARE!!!!!

Most people who are retired have their Social Security checks and any other retirement Income checks automatically deposited in their bank.

In May of 2011, a law was passed that protected Social Security and Retirement Funds from creditors, via garnishment/levy.

HOWEVER.... (THIS IS REALLY IMPORTANT!)

As long as your Social Security and/or "Retirement" income is deposited in a bank account that has NO OTHER FUNDS CO-MINGLED, then your bank will not "FREEZE" your account if they receive a writ of levy.

For example:

Let's say you are retired, receiving a modest Social Security check and a small Retirement check. Together, they are automatically deposited in you bank account.

The problem is that you just don't have enough money each month, so you take a part-time job earning $500 or so extra each month.

You deposited that extra $500 together with the other Retirement funds and not that account has CO-MINGLED FUNDS and if a writ of levy were presented to the bank, the banker would have no recourse but to freeze the account (you cannot withdraw ANY FUNDS) and would have to send the amount of the levy to the creditor!

Or.....

Let's say you took some of your retirement funds that are automatically deposited in you checking account and transferred them to a savings account.  Those funds in the savings account are now SUBJECT TO LEVY!

 

LESSON HERE....

If you are retired, and receive a summons and/or judgment, you need to sit down with your banker and make sure that you funds are protected from any future/possible levy.

 

FINALLY....

If you have been garnished, it may not be too late to put a stop to the garnishment.

Contact the attorney for the creditor/plaintiff to see if they would be willing to accept a reasonable repayment plan rather than continuing with the garnishment.

For most people, losing another 25% of their income when things were financially tough anyway, would cause them to seek BANKRUPTCY protection.

So, the creditor/plaintiff might be open to another option rather than wage garnishment.

We have been able to help many people, just like you to stop a garnishment, but time is critical.

If you would like help or advice, just let us know:

 

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Tags: wage garnishment, debts, stop creditor calls, debt collector, debt settlement, Bankruptcy, bank levy

Preventing Wage Garnishment in Oregon

It is much easier to PREVENT a WAGE GARNISHMENT than to STOP A WAGE GARNISHMENT! If it's already hard to pay bills with your take home pay, what would you do if that was cut by 25% more!

Here are some VERY IMPORTANT things you must know in advance.

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I've been helping people deal with debt issues for almost 15 years now.

I've taken hundreds of calls from stressed-out, scared, "OMG, what am I going to do now?" people who had had their payroll check garnished!

The title of this blog is Preventing Wage Garnishment in Oregon, but it applies to all states.

OK, so how do you PREVENT a Wage Garnishment?

If you have just started to fall behind or have fallen behind on making the required payments on your credit cards or other unsecured debts, here is what normally happens BEFORE a wage garnishment begins:

  • First, you get calls & letters from your original creditor
  • Then, you get Calls & letters from a debt collector
  • You may be issued a Summons
  • You may get a Judgment awarded against you
  • Finally, you may be Garnished

 

Let's walk through what you MUST DO in order to PREVENT A WAGE GARISHMENT:

 

Calls & letters from your original creditor(s)

When you are behind in making your monthly payments due to your creditors, those creditors will try  to help you get caught up and/or get a fresh start on repaying your debt.

Let's face, the creditors want to get repaid plus interest and fees, so at first (maybe the first 3 months or so you are behind), they will call and send letters.

Unfortunately, as long as your account is with the original creditor, they have the right to call you EVEN if you write a letter to stop calling.

Now, once they charge off or assign your account to another agency...debt collector, you can put a stop to those calls.  I'll show you how in just a minute.

I understand how stressful and possibly embarrassing it is to get calls like that, so at this point, rather than ignore them, try saying something like this:

"Yes I know that I am behind, and I fully intend to get caught up just as soon as possible.  But, please stop calling me."

Sometimes this works and the original creditor will reduce or even eliminate the calls. 

But, don't expect that to happen every time.

Sometimes they can be very rude!  In that case, don't waste your time trying to explain or arguie,  just hang up!

As to the letters....

You may get a letter offering you:

  • Reduced payments for 6 months or so to allow you to get caught up...or,
  • A settlement offer to reduce the balance you owe, if you can that amount in a lump sum or just a few months.

While I am not in favor of the first offer which is called a "Hardship Plan", sometimes the SETTLEMENT OFFER is not bad...if you have the funds to take advantage of it!

If the original creditor cannot get you into some kind of repayment plan or  "back on track" in 3-4 months, they most likely will charge off, transfer or sell you account to a debt collector.

 

Calls & letters from a debt collector

 

ISo, the calls and letters start again!  Lots of calls and letters!

But now, you can put a stop to those calls.  Here's how:

STOP Collection Calls Free Sample Letter

But again, just because the calls stop, the letters continue, so you are not "out of the woods" yet!

Depending on the type of debt collector your account has landed with, you may be able to get a settlement, whether in a lump sum payment or possibly a settlement paid out over several months.

Here are some actual debt settlements we have completed for our clients:

Recent Settlements See what we have  done for our clients!

If your still not able to make REASONABLE payment toward a settlement, then the debt collector may decide to FILE A CLAIM and then you would get a SUMMONS.

 

Summons

 

If you have ever had a summons delivered to you at home or even at work, it is a very stressful and humiliating experience!

Although most of the time the summons is delivered, in person, by a person contracted by the debt collector, sometimes a summons may be delivered by a sheriff officer!

 

BUT....DON'T....FREAK....OUT!

 

  • You are not going to jail!
  • They are not going to take your TV or other "stuff".
  • In about 99.9% of the time, you are never going to court.

So again....

DON'T....FREAK....OUT!

The SUMMONS will state who the PLAINTIFF is (that's the creditor or debt collector) and name you as the DEFENDANT.

It will also state what the amount of the claim is (how much you owe now, including interest, fees, etc.)

Then it will state something to the effect that you have"20 (or 30) days to give an ANSWER to the court at (address, etc.).

 

DOES THIS MEAN YOU HAVE TO GO TO COURT?

 

NO! NO! NO!

 

It means that if you KNOW FOR CERTAIN and HAVE PROOF that you do not owe this CLAIM, then you can file an ANSWER to the court in the allotted time (usually 20-30 days from receipt of the summons).

The ANSWER must be in the correct, legal document form and so you most likely will need an attorney to prepare itAnd, in addition to attorney fees, their is a hefty fee to file the ANSWER with the court!

So again, don't start down that road unless you know you can prove that the claim has no merit!

 

CAN A CREDITOR OR COLLECTOR GARNISH YOUR WAGES OR BANK ACCOUNT AT THIS POINT???

 

NO!

It is a misunderstanding that just because you are behind on your payments a creditor or collector can get a wage garnishment.  NOT TRUE!!!

Before that can happen, a JUDGMENT must be awarded by the court.

I'll explain more in just a minute...

 

OK, YOU GOT THE SUMMONS, YOU OWE THE DEBT....NOW WHAT?

 

This could be the most important point for you to take from this article...

 

DO NOT IGNORE THE SUMMONS !

 

I can't tell you the number of times a prospective client or even one of our current client calls and says that they have been garnished and admitted that they had received the summons, but just ignored it!

 

REALLY????   WHAT WERE THEY THINKING???

If a creditor or debt collector goes to the EXPENSE and TROUBLE OF FILING THE CLAIM and PAYING FOR IT TO BE DELIVERED, DON'T YOU THINK THEY ARE SERIOUS?

On the other hand....

In most cases, we have helped our clients AVOID GARNISHMENT by either negotiating a:

  • SETTLEMENT, LUMP SUM OR TERM PAYMENTS on a reduced balance, or
  • STIPULATED AGREEMENT

So, just because you have received a summons does not mean it's too late, but, we need to move fast to prevent a...

 

Judgment

 

Most of the time, a person who is in such a severe financial situation that they cannot keep up with their debts and these debts have gone to a debt collector and a settlement or repayment plan could not be arranged, a DEFAULT JUDGMENT will be granted by the court to the plaintiff (creditor or debt collector).

Now, once the JUDGMENT has been awarded, NOW, AND ONLY NOW, they (the plaintiff) can apply for a WRIT OF GARNISHMENT.

Most states allow for up to 25% of the "take home/after tax check" to be garnished (deducted) !!!!

There are EXEMPTIONS FROM WAGE GARNISHMENT.

Some include:

In Oregon, income under $218 after tax/take home income. In other words, if you bring home less than $915 per month, you cannot be garnished.

Other sources of income that are exempt from garnishment:

  • Social Security
  • Retirement
  • Supplemental Security Income (SSI)
  • Public assistance (welfare)
  • Unemployment benefits
  • Disability Income (other than SSI)
  • Workers compensation
  • Spousal and Child support

WARNING!!!   If you have a judgment against you and receive income from one or more of the sources above, you should make sure your bank understands that any garnishment request should be denied!

If you don't and the bank doesn't do it's "due fiduciary diligence" and transfers your funds, you can get them back, but it may take some time!

 

OK, if you were barely paying the bills before, and 25% is deducted from your check, what are you going to do now?

 

BANKRUPTCY

 

When I refer to "bankruptcy", I like to call it "BANKRUPTCY PROTECTION".

The bankruptcy laws in our country and your state, are there to PROTECT you from losing everything you have when a dire, financial crisis hits you!

Yes, I think a person should do everything possible to AVOID bankruptcy, but when all else fails, the you need to seek the help of a qualified bankruptcy attorney.

The bankruptcy attorney can not only advise you on what type of bankruptcy plan you qualify for, but they will put a stop to all calls and collection efforts by your creditors.

 

FINALLY . . .

If, or when, you face a financial hardship and you just can't keep up with the payments, you have options!

Do not...I repeat...DO NOT "hide your head in the sand"!

 

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Tags: debt collection, wage garnishment, debt settlement, oregon wage garnishment, debts, bankruptcy attorney

What is a 1099-C and What to do About it!

If a creditor settled or wrote off a debt for you in 2015, you may get a 1099-C.  Here's what you can do to avoid paying any additional tax...

Debt settlement is an option that we use and you can use to help avoid bankruptcy and become free from the burden of too much debt.

Basically, is a debt settlement, the creditor or in most cases a debt collector who has purchased the debt agrees to accept an amount far less than the actual current balance.

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If the "forgiven" amount is greater than $600, then the creditor or debt collector may report it to the IRS.  They don't do it in every case, but you need to be aware of what to do about it if it happens to you!

There a couple of different looking 1099-C forms.  Here is an actual form one of our clients received and I'll walk you through the process of how to file the proper forms to exempt the settlement/forgiveness when you file your taxes.

Here is an actual 1099-C one of our clients received.  Click to view:

1099-C

The actual balance at the time of the settlement was $3,041 and the settlement was for $788, saving this client $2,253!

The 1099-C reflected this and you can see that in box 2, the amount is being reported as "Amount of debt canceled".

If this client did not file the proper forms with her 2014 taxes, she would have had an additional $2,253 added in as additional income and based on her 30% tax bracket (average net federal), she would have to pay an additional $676 of tax!

Here's what she did:

According to IRS publication 4681, she needed to prove that "at the time of forgiveness (settlement), she was INSOLVENT.

All she (and you) needed to do was to list all of her assets vs. liabilities to see where she stood.

This doesn't have to be a "fancy" spreadsheet or anything, but just write down (again, at the time of the settlement/forgiveness) your assets/equity on one side and your liabilities/debts on the other.

Something like this:

                      Assets:                                           Liabilities:                                  

         Home value:          $  0 (she rents)          Credit Cards total (including this debt):    $15,000

         Auto value today:   $ 5,000                      Auto loan:           $1,000                            

         Savings:                 $    250                      Student loan:      $ 10,000

         Personal assets:    $ 2,500                      Medical bills:       $     500

         Total Assets:          $ 7,750                      Total liabilities:     $ 26,500

It is clear that her Liabilities were greater than her Assets, therefore the amount forgiven should be exempt from taxation. 

NEXT:

She downloaded IRS Form 982 and followed the simple instructions we gave her:

In Part 1, on line 1a, she marked the box with an "X".

In the same Part 1, on line 2, she wrote in the amount that was forgiven, $ 2,253.

That's all on the Form 982. 

NEXT.....

She could have just included that with her tax return and in most cases, that would have been sufficient.  But, I recommend writing a brief, legible explanation of what caused your situation, etc.  Again....very brief neatly written (doesn't have to be typed).

Something like this:

In 2014, I was laid off from my job of 15 years!  As I looked for work, I had to rely on credit to get by.  When it got to the point that I just couldn't keep up with the payments, I considered bankruptcy. 

Fortunately, the bankruptcy attorney I went to see referred me to a Debt Management Company who helped me pay off and/or settle my debts.

 

Finally....

You have:

  • Asset vs. Liabilities worksheet
  • IRS Form 982 completed (yep, just two boxes)
  • Brief, legible handwritten explanation of your circumstances

 

Now....

  • Make a copy of these along with your tax return for your files.
  • Mail your tax return along with the documents above.
  • That's it!

 

If you would like more information or need any help, click below:

FREE DOWNLOAD 1099-C PACKET

 

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Tags: debt collector, credit card, 1099-C, debts, additional taxes

Dealing With Debt, Part 3, Bankruptcy

If you find yourself unable to pay your bills, about to lose your home, or in a financial hole so deep that you can't climb out of, then it is time to look into filing for bankruptcy protection.

This is the final blog about DEALING WITH DEBT.  There are basically 3 ways to deal with debt:

 

BankruptcyIn a bankruptcy, you will eliminate most of your debt or you will be able to schedule a repayment plan that will fit your budget, given your dire financial circumstances.

But, bankruptcy comes at a cost of your credit score and possibly some of your assets.

Yes, after you complete your bankruptcy, you can still get credit, but usually the interest rates are higher and the credit limits are lower.

This is why it is so important to gather as much information you can from an experienced bankruptcy attorney.  The initial bankruptcy consultation should be free and most bankruptcy attorneys will work with you as to payment of their services and fees.

Individuals filing personal bankruptcy will generally be able to file a CHAPTER 7 or a CHAPTER 13 bankruptcy.

Under normal circumstances, a Chapter 7 bankruptcy will take about 90 to 180 days to complete.  A Chapter 13 bankruptcy will take about 3 - 5 years, depending on several factors.

Good news!!!!  Once your bankruptcy attorney starts the process, the debt collection calls will stop.  If you are not sure if bankruptcy is the best choice for you and would like to put a stop to the debt collection calls, click below:

STOP Collection Calls Free Sample Letter

Individuals or couples with few assets and are looking for a FRESH START, tend to file a Chapter 7 bankruptcy. This type of bankruptcy is basically a liquidation bankruptcy in which a debtor trades all of their non-exempt assets as payment for all of their dischargerable debt.  Many, if not all, personal possessions are protected by exemptions and most consumer debt, such as:

  • Credit Cards
  • Store Cards
  • Personal Loans

Individuals or couples looking to catch up on mortgage payments, get rid of 2nd mortgages, or who are ineligible for Chapter 7 bankruptcy, can file a Chapter 13 bankruptcy.  A chapter 13 bankruptcy involves making a deal with the court to pay a certain amount of your income to the court each month in return for getting rid of all of your dischargerable debt. 

People will choose a Chapter 13 Bankruptcy because there are certain types of debt that only go away in a chapter 13 bankruptcy and, there are certain advantages that can only be had in a chapter 13 bankruptcy.  This type of bankruptcy can be used to catch up on mortgage or child support payments.  However, there is a danger of not completing your plan and thus not getting a discharge.

Filing bankruptcy does not mean that you will lose your home or your car. 

In fact, in some situations, filing bankruptcy will even allow you to keep a car or home that you were about to lose.  This is because bankruptcy allows you to protect some or all of your assets with exemptions.  These are set amounts of personal property that you can protect during a bankruptcy.  Retirement accounts are generally protected as are certain support payments that you may be receiving.

Filing for bankruptcy does not mean that everyone you know will find out!

Only the necessary parties are inform of your bankruptcy filing.  Individuals who receive notice of your bankruptcy filing are creditors, co-debtors, and co-owners of shared assets. 

A bankruptcy will stay on your credit report up to 8 years, but it will have less effect with each passing year.  Filing bankruptcy may hurt your credit score in the short-term, but it allows you the chance to start rebuilding it right away.

Still not sure how to deal with your debt?  Get answers by clicking below:

 

Blog article written by: Noah Bishop of BishopBankrutpcyLaw.com

 

Photo by: www.stockmonkeys.com

 

 

 

 

 

 

Tags: debt settlement, Bankruptcy, debt management, debts, Credit Score, chapter 7 bankruptcy, chapter 13 bankrutpcy, bankruptcy attorney, credit cards

Can a Creditor Levy My Bank Account?

can a creditor levy my bank account

 

Have funds been taken from you bank account by one of your creditors?

 

 

If you get behind on your payments to your creditors, they can legally seize funds from your bank account!  Are you behind on any debts such as:

  • Credit Cards
  • Pay Day Loans
  • Personal Loans
  • Car Reposessions
  • Medical Bills

If you are behind on your payments, don't worry quite yet.  A creditor can take a number of steps to collect, but they cannot contact your bank and take money out of your account without a WRIT OF GARNISHMENT OR LEVY.

A creditor can attempt to collect an unpaid, unsecured debt with:

  • Phone calls (stop the collection calls --> CLICK HERE)
  • Letters
  • Summons to be awarded a DEFAULT JUDGMENT

Even if you get behind a month or so on a credit card bill, your creditor cannot go to your bank to request funds without first going through a series of legal attempts to collect.

Having said that, a creditor/collector is PROHIBITED from violating the Fair Debt Collection Practices Act (FDCPA). If you feel that you are being harassed by creditors, take some time to LEARN ABOUT YOUR RIGHTS.

If a credior has been awarded a judgment concerning the debt you owe, then they can go after your bank funds!

There are ways to stop a bank levy or to recover funds taken or frozen due to a writ of garnishment or levy having been presented to your bank. We can help.  Give us a call or click the link below for a free consultation!

 can a creditor levy my bank acount                                         

Tags: can a creditor levy my bank account, fdcpa, collector, debts