Wage Garnishments and Abstract Liens and how Bankruptcy can help.

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.

Frequently Asked Questions: Debt Consolidation in California
How does debt consolidation affect credit scores?

Initially, it might cause a slight dip due to credit inquiries. However, consistent payments can improve your credit score over time.

What is the difference between debt consolidation and debt settlement?

Debt consolidation involves taking a new loan to pay off debts, while debt settlement is negotiating to pay less than you owe. Settlement can negatively impact your credit score.

What are secured vs. unsecured debt consolidation loans?

Secured loans require collateral (like a house or car), usually with lower interest rates. Unsecured loans don't require collateral but typically have higher rates.

Is debt consolidation right for me?

It depends on your total debt, interest rates, credit score, and payment capability. It's suitable if you can pay off your debt within five years and secure a lower interest rate than your current debts.

Should I consider long-term financial planning?

Yes, debt consolidation should be part of a broader financial strategy including budgeting, cutting expenses, and building an emergency fund.

How do Chapter 7 and Chapter 13 bankruptcies in California differ?

Chapter 7 involves liquidating assets to pay off debts, while Chapter 13 allows debt restructuring over a set period, usually three to five years.

Can my spouse's bank account be garnished for my debt?

Bankruptcy laws offer protections against such actions, but specifics depend on individual cases and state laws.

How can I learn more about my options?

Consulting a California bankruptcy attorney can provide clarity. Firms like The Law Offices of Christopher Hewitt offer free consultations to explore debt relief paths.

Contact Information