Garnishments and Your Chapter 13 Bankruptcy
After consulting with your bankruptcy lawyer Denver, the decision is made that a Chapter 13 bankruptcy is in your best interests. This approach will allow you to stop mounting interest on the balances you owe, and pave the way for repaying the open balances on your unsecured accounts. One point that you need to understand very clearly is that the court will take action to garnish your wages as part of the bankruptcy plan.
With a Chapter 13 bankruptcy, the court essentially takes control of your debts. You will no longer communicate with your creditors in any form. Instead, the court will order that a certain amount be withheld from each paycheck that you receive. Your employer will receive the proper documentation to implement thegarnishment, including instructions on how to forward the collected funds to the court.From there, the funds received each month are distributed according to the plan put in place by the court. Little by little, those payments chip away at the total amount due. As one debt is settled, more funds are diverted to a different debt. In some cases, those debts could be settled in as little as three or four years.

Your bankruptcy attorney in Denver will tell you that during this time, obtaining new credit will be difficult. This is because lenders and creditors know that a Chapter 13 action can be amended to include new debts. For this reason, be prepared to live on a cash basis until all your debts are paid in full and the court ends the garnishment and declares the bankruptcy terms to be settled.