Both private creditors and government agencies can use bank levies and wage garnishment to collect a debt. Private creditors need to obtain a court judgment to garnish someone’s wages — a government agency such as the IRS, the Department of Education, or family courts will do the same to levy a bank account to recover unpaid taxes, defaulted student loans, or past due child support respectively.
How Can Bankruptcy Help? The Automatic Stay
If you are already stretched financially, having your wages garnished or your bank account levied can be very stressful. Filing a chapter 7 or chapter 13 personal bankruptcy can put a stop to garnishments and wage levies via an automatic stay. The stay remains in effect until the bankruptcy proceeding concludes. If the debt in question is discharged in the bankruptcy no further payments are required.
Keep in mind, though, that an automatic stay only applies to debts that are potentially dischargeable in a bankruptcy, which does not typically include IRS, child support, or student loan debts although there are some possible exceptions.
If you are facing wage garnishment or a bank levy for past due debt, it is important to work with an experienced bankruptcy attorney to determine if bankruptcy protection is a good strategy for your unique circumstances. Attorney Charles E. Covey has helped hundreds of Illinoisans get a fresh start. Contact the Peoria law office of Charles E Covey for immediate assistance at 309-674-8125.