Nevada  |  Bankruptcy

If you file Chapter 7, they are violating federal law to garnish your wages. The only exception is an ex-wife trying to collect child support and after your bankruptcy is over, she can collect alimony. About half the time the mortgage company goes after the homeowner. They have six months after the Trustee's deed is recorded to sue you.

Remember, except for the IRS, a creditor needs a court order (judgment) before they can garnish. If you would like to discuss, email me for an appointment.

Once a Chapter 7 is filed, a Court order is automatically entered that prohibits any creditor from pursuing collection of any debt, included Court judgments. Mistakes can happen, and it may take a few weeks for a creditor to receive notice of the Bankruptcy. I have seen garnishments continue when there is inadequate communication with the creditor.

Your question about foreclosure is more complicated. If the only mortgage is a first deed of trust, the mortgage company usually only forecloses on the property & does not come after the homeowner for the difference between the sale price & the amount owed. If the foreclosure is conducted through the judicial process (instead of just by public notice of a sale), the lender would have the right to seek money from the borrower.

If there is both a first & a second deed of trust (or home equity loan), lenders other than those holding the first have the right to collect their money or may "forgive the debt" which could result in tax consequences to the borrower.

I hope this information isn't too technical. I would be happy to discuss what would be involved with providing you with legal representation if you would like to call my office.