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When one is facing wage garnishment, is bankruptcy an option?

When a person in Tennessee is unable to pay their bills, eventually, they could face having his or her wages garnished to pay back their debts. Obviously, wage garnishment puts a person who was already facing insurmountable debt in an even worse financial situation.

Some people in such a situation may consider filing for bankruptcy, but may have concerns over its stigma. However, that stigma is unfounded as filing for bankruptcy can often be the financially responsible thing to do when one is facing wage garnishment.

For some people, filing for Chapter 7 bankruptcy is preferable to wage garnishment. If a person owes on a debt and is having his or her wages garnished, his or her wages will continue to be garnished until the debt is paid.

But, through a Chapter 7 filing, many of a person's debts will be discharged via the liquidation of the person's assets, minus certain exemptions. While not every debt is dischargeable through bankruptcy, if the debt that lead to the garnishment can be discharged through bankruptcy, this may be preferable to garnishment.

Another option a person can consider if his or her wages are being garnished is filing for Chapter 13 bankruptcy. Like wage garnishment, in a Chapter 13 bankruptcy, a person pays their creditors a certain amount each month. But, the amount to be paid is often lower in a Chapter 13 bankruptcy than wage garnishment, which could amount to as much as half of a person's wages.

As this shows, if a person is unable to pay his or her bills and is facing wage garnishment, they may have options, including filing for bankruptcy. That being said, filing for bankruptcy is a big decision. Those who are considering doing so should make sure they understand the process and how it will affect them before taking the plunge.

Source: the nest, "Which Is Worse: Garnishment or Bankruptcy?," accessed on Jan. 8, 2017

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-954-7180
Phone: 423-624-4002
Fax: 423-624-0509
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