Bankruptcy and Wage Garnishments

Bankruptcy and wage garnishments are a natural duo. Though they do the opposite, they are often paired together. If you wages are being garnished, your only option often times is bankruptcy. If, that is, you intend to stop the garnishment.

A wage garnishment is a deduction taken out of your wages to pay off a debt you owe. Normally a wage garnishment is placed on your paycheck by a creditor you owe. The wage garnishment is also referred to as an earnings withholding order. Whatever it is called, a garnishment is a collection practice taken by a creditor to be paid. If bankruptcy is not filed by the wage earner, wage garnishments can tap up to 25% of your net pay. The garnishment lasts until the amount owed has been paid. Unless you file for bankruptcy.

Since a wage garnishment is a form of a court order, it is often imposed involuntarily. You don’t have to allow a garnishment. It is placed there whether you want it or not. Facing such a situation, bankruptcy and wage garnishments often intertwine. Why? Because bankruptcy will stop a garnishment.

As soon as a bankruptcy is filed, the bankruptcy automatic

Retirement Accounts & Pensions Protected?

Almost always are retirement accounts and pensions protected in a bankruptcy filing. This means that retirement accounts and pensions can be kept even though the debt can be eliminated through the bankruptcy.

Lawsuits, judgments, garnishments & bankruptcy

If you have been sued, have a judgment against you or are subject to a garnishment, bankruptcy can stop them all. Bankruptcy prevents creditors from collecting against you. This means creditors cannot sue and, if they already have, they must dismiss their case against you. If there is a judgment against you it is cancelled by a bankruptcy. And if your wages are being garnished, bankruptcy will block it.

Bankruptcy is a trump card that can cripple your creditors’ collection efforts. Bankruptcy is a powerful tool!