Man meeting with a creditor

How Creditors Attempt to Take Your Money

When someone is unable to pay back their debts, creditors have some options to collect the money that is owed to them. Our experienced bankruptcy attorneys know what to look for and how to stop collection activity. Below we outline the most common forms of collection activity.

Foreclosure & Repossession

Your home is one of your most valuable assets. If you have been unable to make your payments, for whatever reasons, a creditor has the right to force the sale of your home through a foreclosure proceeding. Once the foreclosure process has begun you have a very limited amount of time to take action to keep your home. You should contact an attorney immediately when you receive a foreclosure notice.

If you own a vehicle and are behind on the payments, creditors can repossess the vehicle and sell it to recover the money that is due. Like a foreclosure, you should act quickly to save your car but you should be aware that creditors do not have to give you notice before they repossess your car. If your car payment is past due you should contact an attorney immediately.

Wage Garnishment

If your creditor or lender is able to secure a court order for wage garnishment against you, it has the potential to make a bad situation even worse. If you have large amounts of outstanding debt, creditors have the ability to pursue a court order requiring your employer to take a percentage out of your paycheck to pay back your obligations. Creditors can also attach your bank account through a process called non-wage garnishment to collect the judgment obtained against you.

This is particularly troublesome in a situation where you are already struggling to pay off your debts, and having a smaller amount show up on your paycheck can leave you with even fewer options.

How Bankruptcy Can Help

When creditors refuse to back down on these forms of debt repayment, bankruptcy is one of the best ways to put a stop to further abuse. The moment bankruptcy papers are filed, creditors are legally unable to take any collection actions against you under what is called “automatic stay.”

With this benefit remaining in place throughout the entire duration of your bankruptcy, it gives you the opportunity to pursue relief from your debts.
 

We understand the immense amount of pressure creditors can place upon hardworking people, and we are committed to helping you find the financial freedom you deserve. If you would like to learn more about how Musselwhite Meinhart & Staples can help you, get in touch with us today through our website or give us a call at (270) 200-6326 to schedule your free consultation.