If you find yourself in debt and unable to pay it back, there is a fear that your creditors will come after you and begin to take money you need from your paychecks. Creditors may be pursuing you and either be threating wage garnishment, or you may already have experienced it. If you are at that point, you may be considering bankruptcy. For those who are considering bankruptcy, this could be a terrifying proposition; how are you expected to make ends meet when money starts to come out of your paycheck?
What Can I Expect?
Unsecured debt is one of the more common types of debt; this includes credit cards and medical bills. For a creditor to garnish wages from unsecured debt, they must file a lawsuit against you, file a judgement, and a writ of garnishment. In most cases, the creditors tend to be more of a nuisance with phone calls or other tactics to get you to pay them back versus going to court. In most cases, they will not take action against you until you are roughly a year behind in payments. But if they do file action against you, and if you are considering bankruptcy, it is more than likely that bankruptcy can be filed and processed before they begin to garnish wages. It is not a quick process, but there is time for the creditors legal action to go through that allows you a window of opportunity to declare bankruptcy.
In most cases the creditor will have already sold off the debt to a collections agency within 120 days of being behind in payments. When a creditor does file suit against you, the suit is required to be delivered in person, meaning it will not be mailed to you, rather it will be handed to you in person. Just because you have been served does not mean the money will begin to come out of your account immediately. The creditors must obtain the judgement after the suit, then obtain the writ of garnishment, which is the document that allows for your wages to be garnished. These steps all take time, and you will be notified throughout the process.
There is a statute of limitations on these judgements, and companies have a time frame to act on the judgement. These time frames vary based on state, but in some cases can be 20 years. Once they do begin to garnish wages, the garnishment can last until the debt is paid off, or in some cases there is a set period that creditors are allowed to garnish for, such as 45 or 90 days.
It is also important to note that government agencies are not required to get a court order to garnish your wages. The U.S. Department of Education and the IRS are two examples of agencies that may garnish wages without a court order.
If you are considering options because of wage garnishments, it is best that you speak with an attorney to go over your case. It may be best for you to declare bankruptcy, and it may end up saving you thousands of dollars. Remember, if a company files a suit against you, there is more than likely time for you to file bankruptcy before the wage garnishments begin. Every creditor as different processes and time frames before they sell of your debt or file legal action, but there are still specific requirements that are legally required. If you think bankruptcy is right for you, don’t hesitate to contact an attorney before your wages become vulnerable.