The easiest way for someone with a debt to buy themselves time and avoid a possible wage garnishment is to answer a lawsuit complaint they are served with. Even if they are not completely ready to defend against the lawsuit, answering the complaint would prevent the company suing them from immediately obtaining a default judgment. The company would have to obtain its judgment by motion after a hearing. Once a company has a default judgment, they can request an execution, which can be used to place a lien on any real estate their account holder has. The company’s next step would be to start a supplementary process action to collect on the judgment and thereby obtain a court order for wage garnishment.
February 21st, 2011 by Administrator
Potential bankruptcy filers who are working should be aware of any court actions against them and what the current status of those actions are. The reason is that any lawsuits may after service upon the named defendant be brought to judgment, even if the case is contested. Once a lawsuit has been brought to judgment, it is only a matter of time before the collection lawyers receive a court order for attachment on the defendant’s wages. This defendant then would want as soon as possible before having their wages garnished to be a bankruptcy debtor in order to discharge the debt that is the subject of the lawsuit. Named defendants in such cases want to be sure that the appropriate civil procedure for the jurisdiction has been followed as regards service of process upon them and their answer to the complaint. A qualified bankruptcy practitioner in their jurisdiction can then help the defendant get a discharge as a bankruptcy debtor.
January 19th, 2010 by Administrator
The good thing about bankruptcy law is that my clients usually know they’re in financial trouble, and they proceed with relieving themselves of debt on their schedule. However, this field does have its own emergency situations. Perhaps the most prominent is a wage garnishment taking effect. A wage garnishment is a deduction from paycheck earnings, leaving only a minimal amount for debtor living expenses. Once a Bankruptcy petition is filed wage garnishment does not take effect. Of course, this rule has exceptions in the case of loans that cannot be discharged (e.g. student loans).
I recently assisted a client with a Chapter 7 Bankruptcy, who already had his pay garnished and faced the prospect of his next biweekly paycheck having a further garnishment amount deducted and being left with a minimal amount for living expenses. The good news is that this situation is exceptional mainly because of its timing. Rarely does an outstanding debt accelerate to wage garnishment without the debtor taking some preventative action.
An ordinary unsecured credit account balance begins to accrue penalties and interest and is terminated by the creditor after an extended period of time without payments received. Usually the debts are written off and sold to collection agencies. If settlement via a repayment plan is futile, the account is then passed on to law offices who make their own collection attempts before filing suit. Any debtor named as a defendant in a lawsuit needs to be served personally at their current address or by publication in the area of their last known address. Only if the defendant having been served then fails to answer can the company filing suit obtain a judgment by default. An order of judgment is required in order to obtain any attachment on a debtor’s property or garnishment of their wages. Threats to do so should be taken seriously but with the understanding that the entire process needs to take its full course.
You should speak with an attorney in your jurisdiction when an outstanding debt has gone as far as a wage garnishment threat. Filing for bankruptcy is never easy especially in cases when the individual facing bankruptcy might have other simultaneous legal issues such as divorce. The important thing is to talk to an attorney as soon as possible as wage garnishment does and will happen if proper action is not taken.
March 12th, 2009 by Administrator
