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How to Deal with Wage Garnishments and Bank Account Freezes

If you start to fall behind on your debts, there is a chance your creditors could attempt to freeze your bank account or begin garnishing your wages. The garnishment process involves a certain sum of money being automatically withdrawn from your paycheck to be put toward your debt.

Nobody wants to have these financial penalties imposed, so it’s important to be proactive as soon as you believe you are getting too far behind on your bills. Therefore, the first thing you should do is call your creditors or debt collection firms and try to negotiate a payment plan. On the call, explain the details of your financial situation and suggest an amount you can afford to pay every month. This payment plan could buy you the time you need to get your debts paid off without having to deal with wage garnishments or account freezes.

If the creditor refuses your payment plan proposal and decides to proceed with wage garnishment, the company will first need to get a court order. If granted, you’ll have the opportunity to appeal.

Responding to a court order

When you receive the judgment detailing your wage garnishment or account freeze, read it closely to make sure that all of the information is accurate. If you notice anything incorrect, call your attorney immediately to put a stop to the garnishment on the grounds that there has been an inaccurate judgment issued against you.

You should also check to make sure your wages are not being garnished for more than what is allowed under federal law. Creditors may only garnish up to 25 percent of earnings or any disposable income exceeding 30 times the minimum wage in your area, whichever amount is smaller.

If all of the information in the judgment is correct and the garnishment amount is legal, you could pay off the debt using a low-interest loan. It could make a lot of financial sense for you to pay off a debt with extremely high rates with a loan that has just a 4 or 5 percent interest rate.

For further tips and information on how to deal with wage garnishments and associated issues, work with a skilled Chicago bankruptcy attorney at DebtStoppers. Call us today at 312-913-0630 or contact us online.

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