If you owe a creditor money, you have probably already experienced the harassing phone calls and threatening letters.
Being in debt can be stressful enough without having a creditor breathing down your neck to collect on the debt.
As you are dealing with creditors, you should know that you may be at risk of having your paycheck or bank account funds seized by creditors.
Wage Garnishment Creditors maintain the right to request a wage garnishment order from the court in attempt to collect on a debt.
Typically, a garnishment order will be given to your employer that requires them to take a portion out of your paycheck to be paid to the creditor.
The creditors get their money before you will be given your remaining paycheck.
Luckily, there are limits as to how much a creditor can take from a paycheck.
In general, a creditor will only be allowed to take up to 25 percent of your paycheck each month until the debt is satisfied.
Bank Levies Many people don't know that their bank accounts may also be at risk from creditors.
Creditors may place a levy on your bank account as a way to collect on an owed debt.
The creditors will have access to your checking, savings, investment and even retirement accounts in a bank levy.
The problem with bank levies is that, unlike wage garnishment, there is no limit as to how much the creditor can take.
Creditors are free to seize as much of your funds is necessary to satisfy the debt.
Fighting Back The biggest problem in wage garnishment and bank levies is that it often leaves the debtor in worse financial condition.
However, these actions are not taken immediately by creditors.
There is a lengthy process that must be completed before a creditor can obtain and implement a garnishment order.
In general, creditors will only take such actions on accounts that are significantly delinquent.
If you have, or think you are at risk for, garnishment you should contact your creditor right away to review your options.
Many times creditors are willing to negotiate a repayment plan and stop a garnishment order.
However, if you are unable to successfully negotiate a repayment plan with your creditor; contact a financial attorney to represent you.
They can help you develop a plan that can protect your income and assets, as you work towards repaying your debts.
If you cannot afford to repay your debts, filing for bankruptcy can stop all garnishment ordersas your resolve your debts.