Many people avoid filing despite increasing debt because they are afraid of how the process will affect their credit score and ability to rebuild their finances. However, not filing for bankruptcy with a lawyer when you no longer have the ability to pay your debts can have dire bankruptcy consequences.
One of the first steps your creditors will take when you neglect to pay your debts is to garnish your wages. The maximum amount that can be garnished from you paycheck is usually 25 percent of your disposable income if it is greater than 290 dollars, or any amount greater than 30 times the federal minimum wage. While tips are generally not garnished, your wages, salaries, commissions, bonuses, and pensions can all be garnished until your debt is paid.
Liens and Levies
A lien refers to the legal claim over your property by the government or a specific creditor. A levy, on the other hand, refers to the actual seizure of property in order to satisfy a debt. Individuals who fail to pay their debts without filing for bankruptcy may face one or both of these penalties. In the event that a levy is put in place, your creditor has the right to repossess and sell property that you own, such as your car or home—as well as property that is yours but held by another party, such as your bank accounts, retirement accounts, dividends, and even the cash value of your life insurance policy.
Individuals who fail to pay their mortgage for a prolonged period of time may face foreclosure, a process in which the rights to your property are taken away and the property is sold in order to satisfy unpaid debts and liens.
Don’t let outstanding debts increase your risk of repossession, foreclosure, or other bankruptcy consequences . Get the legal representation you need by contacting Burr Law Office at (262) 827-0375. You can also set up an initial consultation by visiting us online.