Are you facing creditor calls, debt collection lawsuits, and wage garnishments? The good news is that with the help of bankruptcy you can put a stop to it all and protect your wages, assets, and sanity. Below are a few ways bankruptcy can help:
If you have unpaid debts, creditors have the right to call you at a reasonable time—generally between 8am and 9pm. They can even call you at work. But once you file bankruptcy creditors must stop their calls. If they fail to stop, they could face fines. How do creditors know you’ve filed bankruptcy? They are sent a notice after you file. Once they receive that notice, they are required by law to stop calling you.
Failure to repay your debts may result in creditors taking legal action against you. If you are faced with a creditor lawsuit, don’t ignore it and fail to appear in court. This all but guarantees the creditor a win. If you go to court, you will need to prove the debt is not yours. Failure to do so will again most likely result in the creditor winning the lawsuit. Once the creditor has a judgment against you, they have extraordinary powers to levy your bank account and garnish your wages. The good news is that filing for bankruptcy will stop a creditor lawsuit immediately, and if the debt is discharged, stop it permanently.
If a creditor wins a judgment against you, this may give them the power to garnish your wages. If you’re working a job, this means that the creditor can seize as much as 25 percent of your net pay according to federal law—some states limit this to a lesser amount. However, by filing bankruptcy, you can stop a wage garnishment right in its tracks, and you may even get some of your money back. In some cases you can recover wages garnished in the 90 days prior to your bankruptcy filing. Speak with your bankruptcy attorney to see if this applies to your case.
Bankruptcy is a powerful tool to protect debtors, but you’ll need to move quickly to stop creditors from seizing your assets.