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Do Harassing Phone Calls Make People File Bankruptcy?

By Joseph McDaniel, Esq.

I only wish.

Putting it a different way, people have a remarkably high tolerance for harassment, annoyance, and depression. They often deeply feel that their current inability to pay on a regular basis as a personal failure, and so they see being punished by extremely persistent bill collectors as a reasonable thing. 

Some folks deserve more compassion than others.

Generally, they were playing "ostrich" while their creditors were playing "blitzkrieg".  That's a bad mismatch. They had their pockets picked by judgment creditors who garnished entire bank accounts, as well as 25% their net salaries (if the creditor is a garden variety creditor, and not owed child support, for instance).

Ordinary, garden-variety judgment creditors can only garnish a maximum of 25% of your net wages, and the Judges who preside over the garnishment paperwork aren't unkind; if you ask them (by checking a box and showing up at a hearing), they will usually reduce the amount being garnished to 15% on the basis of "hardship", which it is, of course.

Of course, if you didn't pass the means test, maybe that extra 10% garnishment is a good thing!

Sometimes your evil creditors (one word) can be your best friends, if you are just a smidgen over the means test; after all, if a judgment creditor is garnishing 25% of your net, and you were a hundred dollars over the means test, that suggests that you'll be able to file a bankruptcy soon!

So congratulations on your garnishment! Now let's make it go away, right?


 

Full post as published by Arizona Bankruptcy Attorney Blog on January 10, 2011 (boomark / email).