When you owe another person or organization money and do not pay, they can sue you to obtain a money judgment. To collect on that money judgement the creditor can ask the court for a wage garnishment order that is sent to your employer with an order for them to withhold money and send it directly to the creditor you owe. While there are limits to the total amount of money that can be garnished from your wages, it is not something people want to happen to them.
Equally distressing is a creditor with a court order to freeze your bank account, put a lien on your home or seizing and selling your assets. A Chapter 7 or 13 bankruptcy and the Automatic Stay provision can help you protect your income and assets from being taken and given to creditors.
Some judgement creditors can garnish your income without a judgement.
Where the money owed to a judgement creditor is back taxes, child support or student loans, the creditor can legally garnish your income without a judgement, which is called an administrative wage garnishment. Like traditional court-ordered garnishments, your employer is directed to withhold money from your pay and send it to creditors.
Creditors can freeze your bank account or put a lien on your home.
Creditors and their attorneys have an easier time freezing money and assets they can easily locate and control, such as money in your bank account or putting a lien on your home. When an order to freeze a bank account or put a lien on your home, your money and asset is held up until you satisfy the debts. With the lien on your home, if you sell the home the lien is paid from sale first, before you receive any money from the sale.
Your assets can be seized and sold.
Certain assets that can be easily identified and valued can be seized and sold with a court order. For example, your boat, classic car or motorcycle can be the subject of a creditor seeking to collect on a money judgment.
Chapter 7 or 13 bankruptcy and the Automatic Stay provision stops creditors in their tracks.
When you file a Chapter 7 or 13 bankruptcy cases, you automatically have the protection of the Automatic Stay provision of the bankruptcy code. The Automatic Stay makes if a Federal offense for any creditor to continue pursuing you with any collection action while you are in bankruptcy.
About us: Joseph Wrobel, Ltd., works with clients to find out if they qualify for Chapter 7 or 13 bankruptcy, and their options and rights under the law. The firm will also advise and assist clients with questions and concerns about the collectors and their rights to pursue you.
Joseph Wrobel, Ltd. helps people get control of their finances and a fresh start at financial freedom. The firm’s website contains informative videos about financial issues as well as bankruptcy protection for families who want a fresh start. (312) 781-0996.