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Home > Ask The Get Out of Debt Experts > Should we file a chapter 13 bankruptcy? Legal Helpers got us a wage garnishment. – TLRP

Should we file a chapter 13 bankruptcy? Legal Helpers got us a wage garnishment. – TLRP

We have decent income and then lost 1 income 100% – churned up 45k in debt with 20k to irs some of that irs debt is 5k due form last year and 16k due from 2009 just discovered.

We were working with Legal Helpers and they helped us get a wage garnishment – we did not have enough $$ in the acct. We have paid them over 9k in the last year and they did not settle ANY DEBT FOR US – and they were supposed to handle this before they garnished my wage – letting them handle it led to a wage garnishment that occured after I paid off the amt owed – yikes they really stink and they do not do what they said.

Since we make over $100k but have major debt we are assuming all debt will come after us and garnish our wages after this last one.. so we are thinking chpt 13 is the only way to get protect ourselves from wage garnishment – what are your thoughts? We are worried that chpt 13 will make us pay off too much monthly and we will not be able to make the payments – with the IRS they are telling us $1600 a month and not sure we can afford that right now…mortage payments and heloc up to date but take a solid one third of our take home pay. Thanks for your advice, we have to do something before IRS and others come after our wages and we can pay no one.


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This is information that was submitted by a third party and not generated by or Steve Rhode.
  • Michael

    Hi TLRP,

    Garnishments can typically only be applied one at a time. If you have multiple judgements/IRS debt – it will boil down to first in time is first in line.

    Can you provide more detail on your statement above where you said “letting them handle it led to a wage garnishment that occured after I paid off the amt owed”?
    Did you have a settlement that was being paid per an agreement reached and even though you fulfilled your end you still ended up with a garnishment, or are you referring to the 9k in fees paid for a service that never materialized in a meaningful way for you?

    The chapter 13 may indeed mean everyone gets paid in full over a 5 year plan. Depending on all the dynamics at play, chapter 13’s can be like living with one big garnishment until you complete the plan. Please don’t take that to mean you should avoid it, as it may be just what you need to do at this point.

    I have some questions:

    How much have you been setting aside each month in escrow for settlement?
    What is the balance in escrow currently?
    What additional resources can you tap in order to put together and fund a comprehensive strategy that would keep you out of bankruptcy?
    What creditor accounts and amounts do you have in the settlement plan?
    What is the disposition of each account (how delinquent, who collecting now etc.)?
    Do you have a tax professional working with you on the IRS matters?

    If you can answer these questions in a comment reply you will get some helpful tips and feedback.


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