Following into financial trouble is a problem that millions of people will experience at some point during their lives. Sadly, it can become impossible for you to dig your way out of these situations, and this can result in extreme actions by your creditors. While bankruptcy offers many people a way to escape these debts, there are some common questions that you may have about the type of protections offered by bankruptcy, and understanding these answers will help you to better understand what type of relief you can expect.
What Happens To Current Wage Garnishments When You File For Bankruptcy?
When a person falls behind on their debts, it is often possible for the creditor to take actions to garnish a portion of the debtor's paychecks. These garnishments can make it far more difficult for you to balance your budget, which can lead you further into debt. Fortunately, when you file for bankruptcy protection, your attorney will be able stop these garnishments.
To stop the garnishments, your attorney can file a motion to include those debts in the bankruptcy proceeding. When this happens, those creditors will be forced to comply with the bankruptcy process, and this will result in all collection actions ceasing until the case is settled.
Will You Still Have To Make Payments Following The Bankruptcy?
A common understanding is that after you file bankruptcy, you will no longer need to make payments towards your debts. While this is true in some cases, it is not a universal outcome. Depending on the type of bankruptcy protection you pursue, it will impact whether your assets will be liquidated to cover the debts or the debts will be restructured.
When you have the debts restructured, you will be required to make a series of payments until the reduced debt amounts are paid. While the idea of having to make payments after a bankruptcy may not seem appealing, it should be noted that these payments are at a far reduced amount. During the negotiation, your income is a top priority in determining the amount you will have to repay, and this helps ensure that you are never burdened with crushing repayments following these proceedings.
When you are being crushed under debts, filing for bankruptcy protection may be the only way to retake control of your finances. Yet, it is important to understand the protections that this type of protection affords you. Knowing that this filing can stop wage garnishments and that you may have to reduce payments following the filing will help you better understand what to expect when you pursue this strategy for debt relief. Contact an attorney from Anthony Inserra Attorney at Law for more information.