Bankruptcy: The Inside Scoop

Bankruptcy: The Inside Scoop

• Bankruptcy comes with a few stipulations: Before your debt is discharged, you will be required to comply with several court decisions. One stipulation is that you attend a debt management and fiscal responsibility class before your filing is accepted. You will also want to speak with bankruptcy lawyers in Memphis, TN, in order to determine if filing is the best course of action in your case.

Bankruptcy was designed to offer consumers a fresh start after getting into a tough financial situation. Some people, however, prefer to repay their debts due to financial reasons or moral obligations. For these people, the courts offer Chapter 13 bankruptcy as a viable option.

When filing under chapter 7 or chapter 13 bankruptcy you can rid yourself of a substantial amount of debt that as accrued leaving you burdened. You will be protected under the bankruptcy code and alleviated from a variety of debts that you are responsible for. Declaring bankruptcy, whether chapter 7 or chapter 23, you should consider what you are doing. This step is serious and should only be considered in extreme cases after careful considerations to other viable options have been taken into account.

Your wages are garnished when a creditor gets a court order to have your employer take out a certain amount of your paycheck and turn it directly over to the creditor. One common reason for filing for bankruptcy is to stop wage garnishment. Once you have filed for bankruptcy your wages can no longer be garnished. This is because an automatic stay is put in place while your bankruptcy proceeds that prevents your creditors from making collections. If your wages are being garnished for alimony or child support, these garnishments may not be stopped due to bankruptcy. If your case gets dismissed without a discharge of the debts, then the wage garnishments can continue. However, your debt may get discharged which means that garnishments cannot continue, even after the automatic stay is no longer in place. In order to stop garnishments, the creditors need to be notified of the bankruptcy. If they are not notified in time, garnishments may go into effect, though it is possible to get garnishments returned if they were taken out up to 90 days before you filed for bankruptcy. To learn more about how to stop wage garnishment in Seattle as quickly as possible, consult a bankruptcy lawyer.

A repayment schedule of 3 to 4 years is normally agreed, which must be strictly adhered too. And remember that debt settlement programs are not done in a court, so a creditor can walk out and begin legal proceedings any time they want.

Generally, new consumer debt is not allowed within a Chapter 13 bankruptcy. While this may sound restrictive, it's actually a good thing. Since you're unable to accumulate new debt, you will be completely debt-free by the end of your Chapter 13 repayment plan. Isn't that exciting?