Recently, I’ve had an unusually high number of potential new clients that waited to contact me until after their wages started being garnished.
Waiting this long can really cause problems.
Wage Garnishments
Wage garnishment occurs when a creditor obtains a court judgment and then gets authorization to garnish wages, seize bank accounts, put liens against real property, and other remedies. Except in unusual situations, a creditor cannot obtain a court judgment without notifying the debtor (party who owes the money) first.
Here’s the problem: Presumably the person who owes the money to the creditor stopped paying the creditor because of financial difficulties.
Most likely there isn’t a lot of surplus money in the budget each month. Well, once a wage garnishment is authorized, the creditor can garnish (i.e. take) up to 25% of the Net amount of each paycheck. Contacting a bankruptcy attorney at this point is not likely to be of much assistance, unless you have a pool of cash sitting around for emergencies, because whatever surplus income you had in your budget to pay things like attorneys fees will now be taken by the garnishment.
Filing Bankruptcy Can Stop Garnishments
Bankruptcy, of course, can stop the garnishment, but usually your case can’t be filed unless and until you have paid your attorney in full. This becomes very difficult if 25% of your paycheck is being taken.
This is not always the fault of the debtor. Sometimes judgments are entered without proper notice being given, so you don’t have much warning of the garnishment. This can also happen if you have moved recently (or since last giving notice to the creditor) and they do not have your current address to serve legal papers on (in this case, they can do substitute service and get a judgment against you without your knowledge).
The moral of this story is: DO NOT WAIT TO CONSULT WITH A BANKRUPTCY ATTORNEY AND LEARN ABOUT YOUR BANKRUPTCY OPTIONS.
As soon as you know you are delinquent on payments to creditors and may not be able to work out payment arrangements, you should be contacting a bankruptcy attorney to explore your options and assess your eligibility. Failure to do so then may preclude you from being able to have legal representation in a future bankruptcy case.
Photo by Gerry Dincher
