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Ignoring Credit Card Debt Can Lead To Wage/Bank Account Garnishment

Posted By Allmand Law Firm, PLLC || 1-May-2017

Debt is a problem that comes with a number of consequences. This includes garnishment of your income or bank account. When financial instability makes it difficult to pay the bills and creates concerns about the future, it can quickly lead to the accumulation of credit card debt. When the problem goes unaddressed, creditors and debt collectors can take matters into their own hands to recover outstanding debt.

At Allmand Law Firm, PLLC, our bankruptcy lawyers have helped thousands of clients throughout Dallas, Fort Worth, and the surrounding areas of Texas when they needed a brighter financial future. Although all cases are different, clients commonly come to us experiencing symptoms of debt, including wage garnishment. We understand how garnished wages or bank accounts can impact a person’s life and add additional stress, which is why we go above and beyond in our efforts to not only help them take control, but also address the underlying issue that led to the collection action.

What Happens with Garnishment?

Garnishment is a tool creditors and debt collectors use to legally enforce collection of a debt. When a consumer fails to make payments toward debt, creditors and debt collectors can initiate a legal process to legally ensure they receive payment, even if it is not voluntary.

Once the debt collector or credits secures a court judgment against you, they can use it to seize your wages or bank account. In the case of wage garnishment, most states will not allow the seizure of more than 25% of your wages. Also, certain types of income and benefits, such as Social Security income, cannot be garnished. Speak to a Dallas bankruptcy attorney and discuss your options regarding what parts of your income are exempt from garnishment.

In the case of a bank account garnishment, all funds can be seized with few exceptions as noted above. It is important to note that it is up to the debtor to prove what funds in the account are exempt from seizure.

How to Avoid Garnishment

In garnishment cases, time is key. It is important to respond to debt collectors and negotiate a repayment plan or settlement before they sue you. If you have already been sued or have had a garnishment issued on your bank account or wages, speak to an attorney immediately. You might still have available options, including bankruptcy.

Bankruptcy can provide you with the benefits of an automatic stay, which is issued by the court when a bankruptcy petition is filed. This automatic stay will order collection actions against you to stop, including foreclosure, utility shutoffs, repossession, and garnishment. This can afford the time needed to organize your finances for monthly payments in a Chapter 13 plan, or to prepare for liquidation under Chapter 7. It also initiates the process needed to obtain a discharge of debts, which can provide you with the financial freedom and flexibility to gain control of your economic health.

In both Chapter 7 and Chapter 13 bankruptcies, credit card debt can be discharged once the process is complete. This means you will no longer be legally obligated to make payments toward a discharged debt, and will be free from the threat of garnishment should you continue to make payments for any new debt.

Approaching garnishment and the strategies used to address underlying debt issues is always a unique matter, which is why our legal team focuses on personalized representation and counsel. Our attorneys draw from decades of combined experience when helping our clients, as well as the expertise of Attorney Reed Allmand, who is Board Certified as an expert in bankruptcy law. We can review your situation personally and explain what we can do to help.

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