On Behalf of developers | May 12, 2021 | Bankruptcy,Blog
Financial troubles could become an immense burden on many Mississippi residents. When their debt reaches significant levels, seeking protection from the bankruptcy court may be a viable option. A bankruptcy filing might not mean that all obligations go away as restructuring could involve paying back a portion of the debt owed to creditors. That said, for many debtors, bankruptcy rulings seem better than dealing with wage garnishments.
Wage garnishment refers to taking a portion of someone’s salary and redirecting it to pay a creditor. Garnishments often occur when someone ends up behind on child support or tax payments. However, other creditors could seek wage garnishments through a court order. A credit card company might seek a civil judgment from a court for wage garnishments to procure money owed.
Wage garnishments could leave someone in a terrible financial situation. The smaller paycheck could mean harsh financial burdens and not enough money to pay off other debts. Bankruptcy might then become an option that the debtor considers.
When someone files for Chapter 7 or Chapter 13 bankruptcy, any existing wage garnishments would likely stop. Bankruptcy’s “automatic stay” rule allows addresses wage garnishment and other collection actions. The bankruptcy court could potentially step in when a creditor attempts to harass someone unable to pay. However, it’s important to be mindful that Chapter 13 requires following an installment plan, and failing to make payments could lead to defaulting on the bankruptcy deal.
Entering into bankruptcy requires careful thought and consideration since the filing impacts a person’s credit history. Individuals currently dealing with repossessions and wage garnishments may find the bankruptcy protections necessary. Anyone with questions about bankruptcy, such as how to file, could speak with an attorney.