bankruptcy Information

Matthew Foley
Esq. & MBA
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Avoiding Lawsuits, Bank Levies, & Wage Garnishments
The debt industry is changing, and more and more of unsecured debt is being placed with collection law firms, versus collection companies. Arizona has several large collection law firms that handle the bulk of unsecured debt, including Bursey & Associates, Guicleumo & Associates, and Hameroff Law firm in Tucson. If you have unresolved debt that remains outstanding, it is a very high probability that eventually you will be sued on the unresolved balance.
Unresolved debt, such as credit cards, leads to lawsuits, wage garnishments, and bank levies.
A civil lawsuit turns a collection account into a judgment. Once a creditor has received a judgment, a creditor can garnish wages and/or levy a bank account. In the state of Arizona, creditors can garnish wages up to 25% of a debtor’s income. That number is staggering, especially considering financial hardship may have gotten you into this situation in the first place. Wage garnishment is known as “writ of garnishment” to the court and occurs when a court instructs an employer to withhold funds from a debtor’s wages for the benefit of a judgment creditor. When a wage garnishment occurs, not only will you be aware of your financial struggles, but now your employer may be aware as well.
A bank levy is when a judgment creditor takes money from your bank account. An individual is not notified in advance, but rather will be told after the fact, that funds have been removed from their bank account(s) via a court order. An individual can protect $300.00 in their account, and a married couple can protect up to $600.00 in an account. Social security is also exempt up to 100% of the proceeds traceable in the account. In addition to a court ordered bank levy, credit unions (and some banks) will withdraw money from an account to satisfy an outstanding or delinquent debt with that same financial institution. For example, Vantage West Credit Union could/will offset money from a checking account to pay towards a delinquent Vantage West credit card.
If bankruptcy is the right financial tool, it will immediately end wage garnishments. All garnishment efforts will be forced to cease when a bankruptcy petition is filed. Bankruptcy will also prevent bank levies and resolve outstanding judgments.