Articles Tagged with Stop Garnishment

Yes! You can get back money that was garnished from your wages (if the debt is dischargeable) if you file bankruptcy.  In Mississippi, you can only recover garnished wages were taken within 90 days of your filing for bankruptcy and the amount taken was more than $600.  You are not entitled to recover everything that’s been garnished if you’ve been garnished more than 90 days before you file bankruptcy; just the 90 day portion they took right before you filed bankruptcy.  ***Keep in mind that filing bankruptcy STOPS a garnishment the moment the case is filed!

Depending on which kind of bankruptcy case you file and the amount, the money may go back to you or it may go to the Trustee.  But either way, it’s beneficial to you.  How would it be beneficial for it to go to the Trustee? Keep reading. I’ll explain!

Example #1: You have been garnished for the past 2 months for a total of $800 and you file a Chapter 7 bankruptcy tomorrow.  The first two criteria are met (within 90 days and over $600) so you stand to regain all $800.

Example #2: You have been getting garnished for 6 months for a total of $1,500 and you file a Chapter 7 bankruptcy tomorrow.  You’re qualifying but only the portion taken within 90 days will be eligible – which lets say totals $700.  The creditor is entitled to keep the other portion ($800).

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FTC logo      If you are getting debt collection calls you are not alone. About one in seven people in Mississippi is being hounded by a debt collector. Buying debt and debt collection is a billion dollar business and becoming a larger, more complex industry. The original creditor sells their debt to a debt collector, and often they sell the same debt multiple times meaning that multiple debt collection companies are attempting to collect the same debt! Debt collectors often attempt to collect from the wrong person, overstate or inflate the amount owed by adding collection fees, and even attempt to collect debts that are not real (may have been paid in the past or was never a debt to begin with).
Along with these abuses, details of the original debt are lost or outdated. Creditors selling debt are basically selling lists that have contact information and amounts owed – and little more than that in way of details.  Collectors then may have a mixture of valid debts, debts that have been since settled, or debts that are past the statute of limitations and can no longer be collected. It’s not clear exactly how many consumers are wrongly harassed for accounts that are not their debt. Debts purchased by the large debt-buying firms have no documents, contracts or other proof of the debt. Your debt will be sold to a debt collector for pennies on the dollar. It’s not just the original credit that sells debt.  Debt collection companies then may sell the lists they have purchased to other debt collectors, who may then sell it to another, then another, and another. It’s not uncommon for people to all of a sudden be receiving debt collection calls and letters about something that happened years ago but now, the debt has shown up on a list that has been sold to another company, and here we go again. Continue reading

If you are being sued by a creditor and you don’t show up for court, the debt collector wins, right or wrong – they win and get a judgment against you. With a judgment the debt collector has the power to garnish your wages or seize your bank account, or any bank account with your name on it.

Don not ignore a summons or copy of a lawsuit if you are served with one. Contact a lawyer early on to find out what your options are. Knowing what steps to take and having the information to decide what is best for you is the most important thing to know. Dealing with any legal action can be overwhelming. It is crucial to speak with a lawyer regarding the options that exist for you.

A garnishment is an order from a court that is sent to your employer requiring them to withhold certain amount of money from your paycheck. This money is then sent to the creditor. Mississippi law limits the amount of money that your creditors can take from your wages to 25%. Most creditors are limited to the 25%, but some creditors like the IRS, State Taxes and Child Support are allowed to get more.

What Is The Process For Getting A Garnishment?

1. A creditor must file a lawsuit against you and serve you with a summons telling you to come to court.

If you are having trouble paying back your student loan debt, you may be relieved to hear that the Department of Education has created new rules that will give you more protection from debt collectors collecting on federal education loans.  These new regulations should make it easier for you to get your loans out of default.

These rules do not apply to private student loans, only to loans made or guaranteed by the federal government.  If you are in default you can”rehabilitate” loans by making nine “reasonable and affordable” on-time payments. This will allow you to get out of default and become eligible for further federal student aid or other repayment programs.

Some private debt collectors who were collecting on federal loans were failing to offer payments that borrowers could afford; instead offering payments based on a percentage of the borrower’s total debt.  Such payments meant increased commissions for the collection agencies, but were unworkable for borrowers.  Debt collectors were also demanding minimum monthly payments without telling people about the more affordable alternatives, even though the laws of federal student aid does not require those minimum payments.

To review the various commercials of bankruptcy and mortgage attorney Frank Coxwell as seen on TV in Mississippi, click here to go to our Media page.  Mr. Coxwell covers various areas of bankruptcy and mortgage legal options available in Mississippi to consumers struggling with financial issues. Stop garnishments. Stop Foreclosure. Deal with student loan and tax debt.  Stop lawsuits. Protect yourself, your paycheck, your family, and your property.

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To review the various clips of attorney Frank Coxwell’s appearances on the Fox 40 AM Show, click here to go to our Media page.  Mr. Coxwell discusses multiple topics on the show – the garnishment process, how to stop foreclosures in Mississippi,  how to deal with student loans, the pitfalls of the new “business” credit card offers, and more.

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In order for a creditor to garnish your wages, they must first file a lawsuit regarding the debt in question and receive a court judgment in their favor (win the lawsuit).  Once this occurs, they will receive an order of garnishment also referred to as a writ of garnishment.  This order is sent to your employer who must hold this writ of garnishment for 30 days.  The reason a 30 day hold requirement was placed into the process is to allow time for the employer and the employee to verify that the order is for the correct person, etc.  The problem is that employers are not required to notify you that they have received an order of garnishment.  They may simply hold it and you will find out 30 days later when your first check is garnished.

It’s important to note that a garnishment is applicable to any money in possession of a third party (ie: your employer, your bank, etc).  It’s not limited to only what you earn.  Wage garnishment is simply the most common form of garnishment.

Garnishment is an option for a creditor for any type of debt that results in a judgment in favor of the creditor.  Lawsuits for breach of contract or to collect debts owed for cars, medical expenses, promissory notes, etc are all applicable.  Even debts relating to taxes and domestic support obligations (child support or alimony) can lead to garnishment.

I get countless calls from people asking what they can do to about their parents or grandparents who co-signed for them on a student loan and are now facing garnishment, loss of their tax refunds, or even seizure of their bank accounts because they co-signed and the loans have not been paid.

This is a common tactic for debt collection on student loans.  If the student isn’t working – they will go right after anyone who co-signed for the loan.  And they have broad powers – there is no notice required – they can garnish, etc without warning unlike collection of normal debt where there must be a lawsuit filed and judgment obtained first, etc.

It’s pretty well known you cannot wipe out student loans through bankruptcy, but if you file a Chapter 13 bankruptcy, you can stop all action – against you AND against anyone that co-signed for your student loan.  Chapter 13 bankruptcy protects the debtor and co-debtor.  Both do not have to file – just one.  If the co-debtor files it protects the main debtor and vice versa.  For example – mother co-signed for son’s student loan.  Mother files Chapter 13 bankruptcy (maybe even for other reasons) – it protects the son regarding the student loan they both signed for.  Or son files Chapter 13 bankruptcy – it protects the mother.