Each year, thousands of people elect to take personal bankruptcy to obtain a discharge from their obligation to pay certain debts. For most people, the decision to take personal bankruptcy is met with a great deal of personal resistance. This is a natural reaction as most people generally want to pay their debts. This desire to pay debts often leaves a person borrowing from one creditor to pay off another, paying minimum monthly payments and never decreasing the principal balance of an account or taking out cash-advance or payday loans with exorbitant interest rates and unrealistic repayment terms. Often times this will happen until the point where people start missing payments or fall behind making only partial payments and are never able to catch up. This can lead to a serious problem that will only make the situation worse; wage garnishment.
In most cases, when a debt is past due, the lender has an option to accelerate the terms of the loan and demand payment of the entire balance at once. If a person is unable to pay the balance and cannot negotiate a new payment plan, the lender has the right to file a lawsuit and collect a judgment for the amount owed, often time plus attorney’s fees as well. Once a lender has a judgment they have several ways to collect from someone. In some cases they can repossess the collateral, meaning they can take the property back. Or, they can put a lien on property a person owns, or they have the ability to request a garnishment of a person’s wages until the debt is paid off. Wage garnishment can be especially burdensome because this money comes directly out of a person’s paycheck and leaves them with less money each pay period to pay remaining debts and for household items. This obviously creates a cycle where more creditors can sue and recover more judgments. This is especially likely because a creditor can garnish up to 25% of a person’s net pay, or take home pay, each pay period. Obviously, this significantly diminishes the amount of money left to pay remaining debts. Thus the cycle continues and becomes even more taxing.
What To Do When Faced With Wage Garnishment:
Although there are options to help alleviate a wage garnishment once it is in place, the most important thing to do is consult an attorney about filing bankruptcy at the first sign of being unable to pay debts. The best option is to schedule a free consultation with an experienced bankruptcy attorney to decide if taking a personal bankruptcy is the right option.
Knowledgeable and Experienced Phoenix Bankruptcy Lawyer:
Platt & Westby, P.C., has been helping Arizonans with bankruptcy matters for nearly 40 years. We take pride in the service we provide. Our Arizona bankruptcy attorneys at Platt & Westby, P.C., charge reasonable flat fees to file personal chapter 7 and chapter 13 bankruptcies. Contact our office or call 602-277-4441 to schedule a free consultation with one of our experienced Arizona bankruptcy attorneys today.