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    Many people in Mesa, Arizona struggle with wage garnishments and levies placed on their bank accounts. These happen when a creditor obtains a court order to withhold some of your paycheck or put a hold on your bank account in order to repay monies you owe.  This act of repayment of debt is particularly detrimental as you are already probably struggling to make ends meet.

    What is a Garnishment?

    Wage Garnishment is a method of collection your creditors may use after obtaining a judgment against you. A wage garnishment is typically 25% of your wages, which is also the legal maximum. Your employer is required by law to comply with the garnishment. The garnishment will continue until the debt’s balance is paid in full. The balance will usually have added interest and legal fees. Two creditors may not garnish your wages at once, but can line up so that a new garnishment begins as soon as you pay the first in full.

    What is a Levy?

    A levy is an alternative method of debt collection where your creditor takes money directly from your bank account. Your bank account will also be frozen so you can’t withdraw all of your funds before your creditor accesses them. If you continue to deposit money into a levied bank account, your creditor may seize those funds.

    What is the difference between a Garnishment and a Levy?

    A garnishment is actually technically a levy on your wages. If you receive a Notice of Intent to Levy, it could actually refer to both your bank account (and other assets) and your wages. You should contact an attorney if you aren’t sure what is at risk of being levied.

    STOP a wage garnishment infographic

    What is the process?

    Private creditors must obtain a judgment against you before garnishing your wages or levying your bank account. You will know your private creditors are on the way to getting a judgment when you begin receiving summons for the debt. A summons will typically give you 30 days to respond or appear in court. If you fail to do either, a default judgment will be entered. The court will then be able to grant your creditor an order for levy or garnishment.

    Government agencies don’t have the same requirement to have a judgment before collecting on your debts. They only need to provide ample notice to repay or dispute the debt.

    How can I stop a levy?

    Your options in stopping a levy are limited. You can pay the debt in full, or work out a payment plan with your creditor. You can contest the lawsuit, or you can simply stop using the bank account in question. If the debt you are being garnished for is dischargeable, you can stop the levy with a bankruptcy.

    Will a bankruptcy help me with either a Levy or Garnishment?

    If you are facing a garnishment or levy, a bankruptcy can help you in both the short run and the long run. When you file a Chapter 7 or Chapter 13 Bankruptcy, an automatic stay goes into effect, preventing garnishments and levies. The stay remains in effect until your case is dismissed or discharged (3-5 months or 3-5 years for a Chapter 7 and Chapter 13 respectively).

    If you are being garnished or levied for a dischargeable debt, collection will not resume when your case is discharged. Common dischargeable debts are credit cards, medical bills, and personal loans. Taxes may even be dischargeable if they meet certain requirements. Therefore, you should review your debts with an experienced Arizona bankruptcy attorney to determine their dischargeability.  

    Contact Our Mesa Garnishment Lawyers

    If you are facing a wage garnishment or bank levy, don’t wait until it’s too late. Filing bankruptcy may help you erase the debts you are being pursued for, and you will be protected from collection from the moment you file. Our experienced bankruptcy professionals are available for free phone consultations. Call today to see if bankruptcy is a good option for you.  Call (480) 800-0033.