There Is Hope When You File Bankruptcy in Minnesota
Filing bankruptcy can be scary. Debtors are often concerned the bankruptcy filing will become public and they will be deemed to be of poor moral character. Neither of these concerns should stop you from exploring the possibility of filing for bankruptcy protection because IT DOES NOT BECOME PUBLIC. The only way to search for bankruptcies requires people to pay money and to make a user name and password. In Minneapolis and Saint Paul, none of the newspapers publish bankruptcies. Your friends, family, and employer generally do not get told about the bankruptcy.
When Creditor Calls Become Overwhelming
Divorce, illness, and job loss can mean financial problems. We’re often forced to choose between paying a mortgage or rent and paying credit card bills. Naturally, paying rent to maintain a roof over our heads is important. Unfortunately, going a couple of months without paying credit card debt means calls from the creditor.
Creditor calls are often ignored, this is human nature. We don’t have an answer, we know we can’t pay our outstanding debt, so we avoid the discussion. Unfortunately, this also means the calls continue and the amount we owe gets bigger.
If you file for bankruptcy protection, these calls stop. Filing for bankruptcy means creditors are obligated to stop contacting you directly and instead must wait for direction from the court, or from your bankruptcy attorney.
Wage Garnishment as a Tool for Debt Collection
Many creditors will go to court and attempt to garnish your wages. According to The National Consumer Law Center, wage garnishments are reversed once you file for Chapter 7 or Chapter 13 bankruptcy. Garnishments are treated as any other adverse collection action. It is important to know that only the court can authorize a wage garnishment for uncollected credit card debt.
There is also a maximum amount a creditor can obtain through wage garnishment. There are exceptions for past-due child support payments and taxes but in general, there are limits as to what a creditor is entitled to obtain through wage garnishment.
Anyone notified of a potential wage garnishment should contact a Minnesota bankruptcy attorney immediately. The potential of losing a portion of your income to a garnishment, even temporarily, could make your financial situation worse.
Which is More Effective Chapter 7 and Chapter 13?
Fortunately, whether you file Chapter 7 or Chapter 13, you will get immediate relief from phone calls and wage garnishment. While both bankruptcy chapters are handled differently in terms of the court, they both provide automatic stays. This means all creditor collection actions must cease.
How to Determine When to File Bankruptcy
Many people think it’s best to wait until you are facing the consequences of unpaid debt to file bankruptcy. This may not necessarily be your best approach. Wage garnishment could result in even worse consequences such as facing eviction or foreclosure. Waiting to file bankruptcy until one of these events occur only adds to your stress.
In reality, it’s often better for your credit to file bankruptcy EARLY on when you realize financial problems are coming. This is because the late payments from the time before bankruptcy will still be on your credit report after bankruptcy. However, if you file bankruptcy earlier, before the payments start being late, then there won’t be any late payments on your credit report. This is because all of the negative reporting stops after bankruptcy. All of hte debts or trade lines get updated to say $0 balance, discharged in bankruptcy. They don’t say late every month. Because there is no new negative activity on the credit report, your score starts increasing right away!
Talking with a bankruptcy attorney as soon as you become aware you are having creditor problems is a good idea. A Minnesota bankruptcy attorney can review your current financial situation and help you determine whether bankruptcy is the right option for you.
Finding the Right Bankruptcy Attorney in Minnesota
There are many law firms in Minnesota, many of them include bankruptcy and credit repair as part of their services. For most people, it is a good idea to work with an attorney who focuses only on bankruptcy. The reason for this is simple: An attorney who focuses on bankruptcy understands the application process, the time involved and can provide you with the proper guidance throughout the process.
At our offices, you’ll find we are knowledgeable, skilled and committed to doing what is right for your specific circumstances. Contact us today and let us help you get a fresh start, stop creditor calls, and reverse wage garnishments.