As an Orange County bankruptcy attorney, some of our clients visit us after their wages have already been garnished. It is an understandable conundrum – one where people try to pay their bills but are barely hanging on and something like a garnishment can tip the scales. Those that are scrimping for gas money and to make the credit card payment can be put into a tailspin if their wages start being garnished. Still, there is a common misconception that you can’t file for bankruptcy in this situation, and that is simply untrue – we are happy to help.
What you need to keep in mind is that if your wages are garnished, that particular debt may continue to exist after the bankruptcy. Whether or not it is, depends on the type of debt. For example, child support and taxes cannot be included in your bankruptcy. These are things that you have to pay no matter what so if this is why your wages are being garnished, that wouldn’t change. What would change is what happens to the rest of the money that you make.
In a Chapter 7 bankruptcy, your debts can be discharged as long as you qualify. Dischargeable debts include any unsecured credit cards that you have, unsecured personal loans, and even secured loans when you don’t mind giving the item back. For example, if you bought a boat you no longer need, you can give the boat back, and the loan can be discharged. This way even if your wages are still being garnished, you have more money to spend on important living expenses. By not having to pay your credit card and other loans, more money will be available for paying rent, buying groceries, gas, etc. As an Orange County bankruptcy attorney, our goal is to eliminate as many payments as possible so that you can get back on your feet and start to build again.
If you are concerned that your wages may be garnished, or that a creditor may be suing you, let us know. While there are things like child support, spousal support, student loans and taxes that cannot be solved with bankruptcy – other debts can. Instead of fighting your creditors in court and then paying to file bankruptcy, you can address all of your creditors in one court action by going through the bankruptcy court. While they will have an opportunity to protest, if the judge certifies your bankruptcy any debt that has been discharged or becomes part of a repayment plan, can’t be used against you in a different collection action. For example, if you bought a ring for $5,000 and stopped making payments, the jeweler or credit card company could go to court and seek a judgment against you. If, however, you file bankruptcy and include this debt in it, the creditor would not be able to seek a judgment or try to collect outside of the bankruptcy court – saving you time and money down the road. For more information or to find out what debts you can discharge, call and speak with an Orange County bankruptcy attorney today.