How to Protect Your Bank Account From Garnishment

how to protect your bank accountIf you’re wondering how to protect your bank account, chances are a decision has made against you by a creditor. If a creditor obtains a judgment against you, they can garnish your bank account. That means they have obtained the right to dip into your savings and retrieve any money that’s owed them. It’s possible to wake up one day with your bank account completely cleaned out. Suddenly, you and your family are living check to check, trying to figure out what your next move will be. Luckily, a little bit of planning can help you protect yourself.

Burke Smith Law helps families protect their assets when creditors come calling. If you’re in a tight spot, give us a call at (402) 512-5490 and we can set you on a path that stabilizes your finances.

What to Do When a Creditor Tries to Garnish Your Bank Account

When a creditor garnishes your bank account, they are required to inform you that a judgment has been made against you. They don’t always, and we’ll get to that in a bit.

The Money Is Protected by Law or Does Not Belong to You

Once you know the judgment has been made against you, you can move to protect your money.

Firstly, when the creditor serves you with a garnishment summons, you receive a form that has three checkboxes. One of those is “objection”. This must be filed within 3 days of the receipt of the summons.

In some instances, the monies that the creditor wants to garnish cannot be garnished by law. Those include:

  • Social Security or disability benefits
  • Unemployment benefits
  • Money from an injury lawsuit
  • Veterans benefits
  • Retirement accounts
  • Child support payments
  • Workers’ comp payments
  • Life insurance payments

In addition, money that is held in an account that does not actually belong to you cannot be levied. For instance, if you’ve opened an account for a child who is using the account to deposit money, then you can provide the child’s paystubs at the hearing.

It bears noting that all the monies held in the account must be of a protected class.

Your Property Is Exempt Based on Its Total Value

You can claim that the money in your bank account is exempt based on the total value of your property. You will need a lawyer to represent you in order to make this claim. It’s a complex motion that requires a lot of paperwork.

Basically, you will claim that the garnishment will produce undue hardship.

Quashing a Bank Levy After the Fact

Some folks figure out how to protect their bank account the hard way. That is to say, after the judgment has been made against them. Legally, when a creditor moves to levy your bank account, they must serve you with papers to announce the judgment. This gives you 3 days to object or file for bankruptcy and stop the levy in its tracks.

Knowing this, unethical creditors fail to deliver notice of the judgment, or deliver it to an old address. This does not give the individual against whom the judgment has been filed time to react. They wake up one morning and all their money is simply gone.

This is known as a “gutter service” because the notice is simply ditched. It’s illegal, but it’s common because it forces the debtor into proving the negative argument “I never received notice of a judgment filed against me.” How do you prove that?

Better question still, what can you do?

How to Protect Your Bank Account After It Has Been Levied

There’s no easy way to say this, but at this point, your options are very limited. The first thing you want to do is contact a bankruptcy lawyer. Then, they will help you through the next part of the process.

File for Bankruptcy

You may be able to get back at least some, if not all, of the money that was levied against you if you immediately file bankruptcy. Most folks are so confused trying to track down what happened that it takes them a bit to orient themselves. Obviously, the best scenario, if you choose to file for bankruptcy is to contact a bankruptcy attorney before the levy.

Contest the Lawsuit

If the creditor’s judgment is too old to contest then this option is off the table. If you were improperly served, however, you might be able to have the judgment deferred. It will depend on whether the judge believes you.

Avoid Using the Bank Account

If the levy the creditor put on your account doesn’t pay off the entire debt, you should avoid using the bank account. They can keep levying the funds until the debt is paid in full. At this point, the question of how to protect your bank account is: you can’t. You’re just trying to protect your money.

Contact a Bankruptcy Lawyer Today

If you’re worried about how to protect your bank account from creditors, Burke Smith Law can help. Contact us today.

Chapter 7 vs Chapter 13: What’s the Difference?

Chapter 7 vs Chapter 13 - Omaha BankruptcyIf you’re dealing with mountains and debt, you likely have many questions about what you should do and how to deal with your financial troubles. Filing bankruptcy can provide the relief you need. But what’s the difference between Chapter 7 vs Chapter 13? Which should you file, and what are the pros and cons of each type of bankruptcy?

At Burke Smith Law, we can give you answers and help you understand your legal options. Call us today at (402) 718-8865 to start the process of regaining control of your finances and getting a fresh start.

What Is Chapter 7 Bankruptcy?

Chapter 7 bankruptcy allows you to discharge most of your debt. Often called “liquidation bankruptcy,” Chapter 7 allows consumers to completely eliminate most non-secured debt quickly and easily. Secured debt, such as car loans and home mortgages, may either be eliminated. Or, you can lower the payments if you choose to keep your property. Some debts, such as tax debt and unpaid child support, is not typically dischargeable through Chapter 7.

In order to file Chapter 7, you must qualify through a Means Test, which determines if your income is low enough to be eligible for Chapter 7. If your household income is too high, you may not be able to file Chapter 7. This is one major difference with Chapter 7 vs Chapter 13.

What Is Chapter 13 Bankruptcy?

Chapter 13 bankruptcy allows you to reorganize debts while keeping most of your property. You may combine all of your non-secured and secured debt payments into one manageable payment plan. The plan allows you to repay your debt over the course of three to five years. After five years, the remainder of most of your debt will be discharged if you have made sufficient payments over the time of your payment plan.

You do not have to qualify for Chapter 13 through an income-based test. Anyone can file Chapter 13, as long as they have not previously filed bankruptcy within a restricted time period. Determining which type of bankruptcy you qualify for is one of the most important considerations.

How Long Is the Process? Chapter 7 vs Chapter 13

Chapter 7 vs Chapter 13 vary greatly in the amount of time until discharge. Although both types of bankruptcy can help you manage debt, the length of time you will be involved in the bankruptcy process differs greatly. Both Chapter 7 and Chapter 13 require extensive legal documents, several hearings, and a meeting of creditors.

However, from start to finish, a Chapter 7 bankruptcy usually takes four to six months. A Chapter 13 bankruptcy, on the other hand, is not considered completed until the payment plan is complete, which can be up to five years. When considering filing Chapter 7 vs Chapter 13, you should have an understanding of how long your bankruptcy process will take.

Types of Debt You Can Eliminate Through Chapter 7 vs Chapter 13

All of your debt can be managed through bankruptcy; however, not all debt can be completely eliminated. For example, bankruptcy cannot completely eliminate tax debt, student loans, criminal conviction fines, and unpaid child support and alimony. However, it is possible to restructure payments and seek payment options through bankruptcy.

The way the bankruptcy court handles debt between Chapter 7 vs Chapter 13 is also very different. Chapter 7 will completely eliminate all of your eligible debts, including non-secured debt and consumer debt. It may eliminate secured debt, but you may have to forfeit, or liquidate, your property. Chapter 13, on the other hand, allows you to keep all of your property while developing payment plans for car loans, home mortgages, and other types of debt.

A Bankruptcy Lawyer Can Help You Decide Between Chapter 7 vs Chapter 13

If you’re dealing with a difficult financial situation, you may be considering bankruptcy. Our skilled attorneys can help you determine the benefits of Chapter 7 vs Chapter 13. Choosing the type of bankruptcy best suited to your situation will help you move forward with your life. Contact Burke Smith Law today at (402) 718-8865.

How Nebraska Residents Can Make Debts Affordable Through Chapter 13

Financial freedom - Chapter 7 & 13 Bankruptcy NebraskaThis is the next post in my series on how the Chapter 13 bankruptcy process can benefit “sub-prime” borrowers in Nebraska. My last discussion looked at how additional mortgages can be “stripped away” through the process. In this article, I’ll take a look at how one’s debts can be made more affordable through Chapter 13. Continue reading “How Nebraska Residents Can Make Debts Affordable Through Chapter 13”

Using Chapter 13 to Strip Away Additional Mortgages On a Nebraska Residence

Chapter 13 Bankruptcy and MortgageThis is the next post in my series on how the Chapter 13 bankruptcy process can assist “sub-prime” borrowers in Nebraska. My last post discussed how residents can use the chapter 13 process to prevent the foreclosure of their home. In this post I will deal with another issue that is common to many homeowners – using chapter 13 to eliminate additional mortgages on one’s residence.

Continue reading “Using Chapter 13 to Strip Away Additional Mortgages On a Nebraska Residence”

Nebraska Residents Can Use Chapter 13 Bankruptcy To Save Their Home From Foreclosure

Foreclosure Attorney Nebraska, OmahaThis is the next post in my series on how chapter 13 bankruptcy can assist “sub-prime” borrowers in Nebraska. My last two discussions dealt with how Nebraska residents can use chapter 13 to cram-down their auto loan and additional benefits achieved through chapter 13. In this article I will be addressing an issue that is still plaguing many Nebraska residents – how to save their home from foreclosure.

Continue reading “Nebraska Residents Can Use Chapter 13 Bankruptcy To Save Their Home From Foreclosure”

Nebraska Residents Receive Additional Benefits When They Cramdown Their Car Loans

Car Loan- Nebraska chapter 13 bankruptcyThis is the third post in my series on how the chapter 13 bankruptcy process assists sub-prime borrowers in Nebraska. My last post discussed how one can keep their car and reduce the principal on an auto loan through chapter 13. In this post I will discuss additional benefits that stem from doing a “cramdown” of your car loan. These benefits include the fact that your loan will receive a lower interest rate and that your car payments can be made more affordable.

Continue reading “Nebraska Residents Receive Additional Benefits When They Cramdown Their Car Loans”

How Nebraska Residents Can Use Chapter 13 Bankruptcy to “Cramdown” Their Auto Loan

Reduce debt through a chapter 13 bankruptcyThis is the second post in my series on how Nebraska sub-prime borrowers benefit from the Chapter 13 bankruptcy process. My first post provided a general overview of topics I will discuss in this series and also went over how one can afford an attorney in order to file bankruptcy. In this article I will delve into how into how one with an auto loan may be able to keep their car, and reduce their debt, by filing for bankruptcy.

Continue reading “How Nebraska Residents Can Use Chapter 13 Bankruptcy to “Cramdown” Their Auto Loan”

How Sub-Prime Borrowers in Nebraska Can Benefit From the Chapter 13 Bankruptcy Process

Debt Attorney Nebraska - Chapter 13 Bankruptcy BenefitsCNBC recently reported that an increasing number of Americans are falling behind on their car loans. Interestingly, a large number of those behinds were those who are considered “sub-prime” borrowers with below average credit scores. Nebraska residents in this situation tend to have other financial problems as well. This is the first post in a blog series on how the chapter 13 bankruptcy process can assist those in Omaha, and anyone else throughout our state, in dealing with excessive debt.

Continue reading “How Sub-Prime Borrowers in Nebraska Can Benefit From the Chapter 13 Bankruptcy Process”