How Does a Bankruptcy Filing Affect a Judgment?
Interviewer: What are other protections does bankruptcy afford people?
As a Result of a Judgment, Your Wages Can Be Garnished up To 25 Percent of Your Pay
Adam: Some people have judgments against them and as a result they could have a garnishment from the judgment or from some other type of legal proceeding. Most people do not realize that a garnishment can be up to 25% of their paycheck, taken every pay period.
A Bankruptcy Filing Offers Immediate Relief from Garnishment
Bankruptcy offers immediate relief from something like a garnishment. Additionally, if there was any type of legal proceeding being initiated, the filing of the bankruptcy stays the execution of any other type of proceeding from going forward.
Will You Lose Your Home and All of Your Possessions If You File for Bankruptcy?
Interviewer: What are you allowed to retain after filing for bankruptcy? I imagine many people feel they will lose not only their home but all their possessions as well.
Adam: In most cases, they can keep their home and most of their possessions. It’s going to depend on the value versus how much they might owe on any item. If they have a car that’s worth 15,000 but they don’t owe 20,000 on it, there’s no actual equity in the car. They will maintain the loan and they can reaffirm that loan and keep the vehicle. Again, you’re just looking at if an item is worth more than what you owe that determines the equity. Some items might be able to be attached to or included with the bankruptcy and it just depends on the equity.
By Adam Hunt