You’re struggling to pay off your debts, and you haven’t contacted your creditor to make arrangements to do so. Tthen after while, your creditor decides that they will file a lawsuit against you to have a judgment issued in your case. Once this happens, your creditor’s attorneys can file a turnover order which will allow them to either garnish your wages or the funds in your bank account.
In instances in which a creditor is successful in securing a turnover order, federal law allows them to request that your employer withhold as much as 25 percent of your disposable earnings each pay period.
Any amount that you’re slated to make once mandatory deductions, including Social Security and taxes, are taken out can be withheld. Once wage garnishments commence, they often continue until the creditor is fully paid back the principal and interest owed.
Bank levies often involve the bank withdrawing any funds in an individual’s bank account up to the full principal and interest amount owed. This could mean that the entire balance in an individual’s account can be deducted from it.
While, in theory, both wage garnishments and bank levies can continue forever until the full debt plus interest is recovered, many with debtors opt to simply close their accounts to stop the withdrawal of funds. Of course, there’s no guarantee that the creditor won’t try to levy another account.
Before a wage garnishment or bank levy occurs, most creditors are required to notify you that they’re going to happen. The one exception to this rule is if the debt that’s being collected is owed to a government agency as is the case with federal taxes, child support or student loans.
In the case of these types of debts, government agencies aren’t required to file a lawsuit and get a judgment in the matter before they attempt to aggressively recover amounts owed. However, they still are supposed to notify you before they take their debt collection efforts to this new level.
If you have been notified that your wages or bank account are going to be garnished, then a Appleton property and asset forfeiture attorney can advise you of different debt relief options that can be pursued in your case.