Illinois Garnishments and Bankruptcy

The remote server returned an unexpected response: (417) Expectation failed.
The remote server returned an unexpected response: (417) Expectation failed.

May 17, 2012 /24-7PressRelease/ -- In Illinois, a judgment creditor can obtain a court order to put in place a wage deduction from your earnings. This is commonly referred to as garnishment. This wage deduction takes a percentage of your wages, before you ever see them, and transfers them to your creditor.

Wage Garnishment

This wage deduction, or garnishment, can only be done where there is a valid judgment debt. In Illinois, the creditor then files an action in court to deduct the lesser of either 15 percent of your gross wages for a week or the amount by which disposable weekly earnings exceed 45 times the federal minimum hourly wage. Federal law also prohibits garnishment exceeding 25 percent of disposable income.

This limit was put in place to ensure that no one would have their entire earnings taken by a creditor, leaving them destitute and unable to afford their necessary life expenses, like food and rent.

Non-Wage Garnishment

Non-wage garnishment, as the name implies, is used against other financial assets, such as a checking or savings account at a bank.

Child support payments and student loan debt can be used to create a garnishment without a court order, so you may not receive the same type of legal notice you would for a typical garnishment.

Exemptions

Retirement benefits and social security are generally exempt from garnishment.

How To Stop Garnishment

A bankruptcy, in most cases either a Chapter 7 or a Chapter 13, can be used to stop a garnishment. Filing a bankruptcy stops all collection activities of creditors, by the creation of the automatic stay, which is put in place as soon as you file your bankruptcy petition.

In a Chapter 7, it may be possible to discharge the entire debt that gave rise to the garnishment, thereby eliminating any possibility of the garnishment being restarted after the bankruptcy is over.

In a Chapter 13, you may, if you have sufficient disposable income, pay some percentage of the underlying debt in your Chapter 13 plan. The plan is like a five-year budget that permits the repayment of some of your debt, and at its completion you receive a discharge.

Determining which chapter of the bankruptcy code will work best for your situation is a complex question and a bankruptcy attorney can review your finances and eligibility, and can help you decide.

Article provided by Charles E. Covey, Attorney At Law
Visit us at www.peoriabankruptcylaw.com

---
Press release service and press release distribution provided by http://www.24-7pressrelease.com

# # #

Read more Press Releases from FL Web Advantage:

View the original article here

Peliculas Online

Student Loans Burying Senior Citizens: Will a Bankruptcy Law Change Help?

The remote server returned an unexpected response: (417) Expectation failed.
The remote server returned an unexpected response: (417) Expectation failed.

May 17, 2012 /24-7PressRelease/ -- According to the Federal Reserve Bank of New York, approximately 37 million Americans have student loan debt, creating a student debt load of $870 billion. The research revealed that student loans are not just for young adults. People age 60 and older still owe $36 billion of their own student loan debts and they are delinquent on more than $3.6 billion of that amount.

There are two main types of student loans: private and government-backed. Bankruptcy laws have changed over the years regarding treatment of these two types of student loans:
- Prior to 1976, all student loans were dischargeable in bankruptcy
- In 1976, Congress required borrowers to wait five years before filing for bankruptcy protection from student loans
- In 1998, discharge of federal student loans was curtailed
- Congress, in 2005, protected lenders further by making it nearly impossible to discharge private student loans

Now, Senator Richard Durbin is attempting to overturn the 2005 law. Currently, the law allows Americans to wipe out most consumer debts through various types of bankruptcies. Stepping back to the way things were prior to 2005 would provide the same bankruptcy protection for private student loan debts as the law provides to every other form of consumer debt.

Although only 15 percent of student loans are from private lenders, private loans usually have interest rates that are higher and more unstable than those on federal student loans. As a result, it is the private loans that most frequently cause debt problems for former students.

According to the Washington Post, consumer advocates have found some borrowers struggling to pay student debt that is decades old, reporting that garnishment of Social Security payments is not uncommon. Additionally, many senior citizens are not only paying their own debts, but are also helping their college graduate children who cannot find jobs that pay enough to cover their own bills.

If you are struggling to pay student loans or other consumer debt, seek the advice of an experienced bankruptcy attorney and find out your legal options. Laws change frequently and your situation may warrant bankruptcy protection.

Article provided by The Roll Law Office, PLLC
Visit us at www.bkinaz.com

---
Press release service and press release distribution provided by http://www.24-7pressrelease.com

# # #

Read more Press Releases from FL Web Advantage:

View the original article here

Peliculas Online