A Collection lawsuit is the first step in the process towards a wage garnishment. These lawsuits occur when you have unpaid debts and the creditor is seeking a money judgment against you. Fighting these lawsuits can be costly and time-consuming, Once, a judgment is rendered, the creditor then has several methods to collect on the judgment (wage garnishment, bank account seizure, foreclosure, etc.). Collections judgments can even prevent you from buying a house or selling your home. Bankruptcy is a powerful tool that will stop most lawsuits in their tracks. If you have already received a Judgment, the bankruptcy can often get the Judgment removed or prevent it from leading to a wage garnishment.
STOP or PREVENT WAGE GARNISHMENTS
Once an individual defaults on a debt, the creditor has the right to sue them and get a Judgment. This Judgment can be used by the creditor to obtain an Order for Wage Garnishment. Under Louisiana Law, creditors have the right to automatically take 25% of your income through a wage garnishment. Yes, 25% of your paycheck goes to that one creditor for that one debt. Wage Garnishments generally include high interest and attorney fees. Therefore, a debt that initially starts out as $2,000.00 can grow to $5,000.00 or more over the duration of a wage garnishment. Once a wage garnishment starts it can be extremely difficult to stop. Wage Garnishments are a powerful tool for creditors because it allows them to get take your money before you even see it.
Bankruptcy is a powerful tool that can be used to prevent or stop a wage garnishment. Bankruptcy creates an "automatic stay" or injunction against the collection of a debt. This includes any action to sue the debtor or to collect wages from their paycheck. Once the bankruptcy case is completed, the debt is wiped away and the creditor can never again take any action to collect on that debt. A creditor who violates the Bankruptcy can be ordered to pay damages to the debtor.
Wage Garnishments and Collections Lawsuits can be stopped or prevented through both a Chapter 7 and a Chapter 13 Bankruptcy. If you currently have a wage garnishment or you are being threatened with one, please call our office immediately so that we can help you save your hard earned money.