If you are in receipt of a letter from the sheriff’s office or have received a letter of intent for a wage garnishment from your employer or HR person, then the clock is ticking and bankruptcy is likely the best option. Wage garnishments have the ability to collect 25% of your wages. There have been very few bankruptcy cases that I have ever seen where the trustee payments are as high as the amount that my clients lose in wage garnishments. Sometimes if your income is below the median income then a chapter 7 can stop the garnishment and you’ll pay nothing back to your creditors. If you are in a high income bracket then you’ll possibly have to do a chapter 13 and pay back whatever your disposable monthly income is to creditors. We take all your reasonable and allowable expenses and see what is left over. Even or people that are making 100,000 dollars or more a year I typically get a plan payment of less than 1000 dollars a month where as with that kind of income a wage garnishment would be taking out 2000 dollars or more. Bankruptcy also offers a lot of other benefits such as the ability to strip liens, cram down financed cars to the current market value. So don’t let a wage garnishment stop you in your tracks, bankruptcy can be a fluid way to reorganize and it will come with some serious benefits and get your financial life back on track and improve your credit score quicker then letting the judgments continue to come in.
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