Bankruptcy is a process that helps many people clear their debts and start over financially. However, bankruptcy can be intimidating to people who do not know a lot about the process. One of the more common questions that people have is what will happen to different types of assets and income.
What happens to wages when you file for bankruptcy in Louisiana?
Wages gain more protection
People sometimes worry that filing for bankruptcy will cause someone to garnish some or all of their wages, leaving them with little to nothing to live off of. However, filing for bankruptcy can actually make it so creditors can no longer take any of your income to help pay off your debts. Keep in mind that it can take up to a couple of weeks or so after filing for bankruptcy for wage garnishment to cease.
Bankruptcy as an option
When you realize that most wages are not only safe from garnishment after filing for bankruptcy but are now protected from creditors, this process might begin to look like a more sustainable option than before. Two types of bankruptcy are Chapter 7 and Chapter 13; the better option of the two depends on factors such as your income and assets and whether you have mostly secured or unsecured debt. For example, if you have a lot of unsecured debt like hospital bills and credit card debt, Chapter 7 might be the better option.
The more you know about bankruptcy topics such as wage garnishment, the better you can decide if filing is the right move for you.