Getting behind on payments can make a lot of people feel like the weight of the world is on their shoulders. Matters only get worse when harassing phone calls from creditors start or when the threat of wage garnishment is upon you.
Even if you are facing the possibility of having your wages garnished because of missed payments, there is hope. You may be able to stop garnishments before they even start or stop them if they've already started. By following these four simple steps, you can regain control of your financial situation and maintain that control later on.
Talk to your creditor before they file a lawsuit. In some cases, it may be possible to prevent wage garnishments from ever happening by negotiating new terms for repayment with your creditor. If successful, your creditor may not seek to file a lawsuit against you in order to gain the necessary court document to then garnish your wages.
Consider filing for bankruptcy. If renegotiating a repayment plan is not possible and your creditor has filed a lawsuit to seek wage garnishments against you, it may be a good idea to consider filing bankruptcy. In Tennessee, once you file bankruptcy, an automatic stay is put into place that immediately stops creditors from receiving money from your paychecks.
It's important to note that automatic stays do not apply to wage garnishments for spousal support or child support.
Talk to a lawyer about your bankruptcy options. Determining which bankruptcy option is best for you depends on your circumstances and your goal for your financial future. For some individuals, Chapter 7 may be the better option because it discharges a large portion of debt in most cases. For others, Chapter 13 may be best because it offers the opportunity to maintain control of finances by restructuring payments.
Talking to a lawyer about your situation will help you determine which option is best for you. A qualified bankruptcy attorney can also guide you through the process of discharging your debt, as well as stopping wage garnishments.
Make a plan to manage your finances in the future. It's always good to have a plan for your future finances after bankruptcy so as to avoid filing again later on. By talking to your attorney about better ways of managing your finances, you will be better equipped to make financial decisions later on that could prevent potential wage garnishments in the future.