Foreclosure and Garnishment of Wages?

Question

I own a manufactured home in Michigan and having a rough time financially. I am thinking about walking away from my home, but wondering if they are legally allowed to garnish my wages. Does anybody have any information?

Answer 1

You don't have to walk away from anything you can file for bankruptcy and keep your home.  Different lawyers charge different prices some very cheap.  It's very easy to do and when it is complete, a very short time your creditors are not allowed to call you much less garnish your wages.  Move fast!!

Answer 2

I do not advise to walk away from your home.  There are services that can assist you - although the interest rate might be high.  As far as garnishing your wages?  I do not believe so, the worst is that your credit will be bad for at least two years.

Answer 3

Ok..now for some real answers...If you walk away and do a voluntary foreclosure, you can cease all the collections for the deficiency balance on the home, as well as any garnishments with a bankruptcy. What you need to do is contact a qualified bankruptcy attorney in your area, most will see you on a free consultation or first free hour consult. They will need to look at your income, list of your debts, assets, and last 4 years of taxes to see if you qualify for a chapter 7 or chapter 13. In a 7 you will need to do the required credit counseling, you'd get scheduled for the 341 Creditors Meeting, (you go to court once), then take the second half of the credit counseling. To qualify for a chapter 7 you have to pass a means test, based on median income, # per household and it's per state. A chapter 13, if you don't qualify for a 7, you would make payments into a plan pay to the US Bankruptcy court trustee. The trustee is assigned to your case, which usually run 3 or 5 years, depending on income. The plan payments pay all your secured debts first...homes, auto loans, and pay any credit card debt, unsecured loans last. My best advice, get in to see a bk attonrey and let them go over all of your information and see what you qualify for. You can check out this website....  www.bcsalliance.com   For you state, a garnishment is this.....MAXIMUM INTEREST RATE:  Legal: 5%   Judgment:  About 7% (changes annually)

STATUTE OF LIMITATIONS ON ENFORCEMENT:

          Open Account (credit cards):  6 years

          Written Contract: 6 years

          Domestic Judgment: 10 (renewable)

          Foreign Judgment: 10 years

This website is great to inform you on debts, credit and bankruptcy information. I would suggest seeing a couple of bk attorney's to compare the fees. The retainers for a chapter 7 can run anywhere from 800.00 to 1500.00....A chapter 13 is usually more money.  If you have any questions, you can email me if you'd like.

Good Luck

Bankruptcy is the only thing that will legally stop a garnishment. If you do not pay what they call the deficiency balance due on the loan after they foreclose, as the last poster stated, you face judgments for the debt, up to 7% of your wages and if they don't find you at work, the surely will find any checking account and attach that usually at 100%....walk away, but protect yourself in the meantime....It's not that easy to just give it up and go........................

Answer 4

There are consequences to walking away from the house.  Your mortgage holder can and will sue you, get a judgment and enforce it against you.  That means garnishing your wages, seizing bank accounts and the like.  In some jurisdictions, judgments are valid for 10 years and can be renewed for another 10.  Your credit, of course, will be destroyed.  This will impact on your ability to get certain jobs as well as insurance.  If you can get loans, the interest rate will be very high.  You will probably be limited to secured credit cards.

Bankruptcy is is a good idea.

Answer 5

First off you must do what's best for you and your family.  Living in a drug infested neighborhood is no life at all.

Now to your question:  The bank cannot garnish your wages until they have received a deficiency judgment.  MI has pretty strict deficiency laws, but its up to the bank whether they sue or not.  

Check out Michigan Revised Statues 125.1449u for remedy to deficiency judgment.

I'd suggest you just walk away and see what the bank does.  If they sue for judgment and succeed, then you will have to file bankruptcy to cancel the judgment, but there's no sense in filing if its not needed.

Mr. Financial Freedom

http://www.5stepstofinancialfreedom.com

Answer 6

I'm with Lilia (good advice).....file Chapter 13 Bankruptcy fast!