Does Chapter 7 Cover Garnishments ?
Chapter 7 bankruptcy is mainly used to eliminate insecure debt. Some examples of insecure debts are credit cards, personal loans, car loans, and home loans. Even insurance payments due to accidents and medical bills are sometimes considered as insecure debt. |
|
Along with getting rid of your debt, Chapter 7 also lets you retain most of your property. This will apply provided your payments are current. Another condition is that there should be no equity in your property. Chapter 7 has several advantages as mentioned below. One of them is to stop garnishments.
Garnishment is a court order to disburse the amount of the debtor among creditors. It is usually collected for child support or alimony. However, it can also be used for Chapter 7 under different circumstances. Garnishments can eat away funds if a person does not know how to handle them. The best way to stop garnishments is by filing for bankruptcy under Chapter 7. If you have an income that is just sufficient to take care of your immediate needs, then you cannot use it to pay the garnishments.
When you file for Chapter 7 bankruptcy, you can use the money you save on garnishments for other important necessities in your life.
Filing for Chapter 7 bankruptcy should be your last option. It is not as good as it sounds, and your credit report could get into grave danger. Having a good credit report is a great advantage when it comes to securing loans. So, weigh all the possibilities before you declare a bankruptcy legally.
More Articles :
|
