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A Chapter 7 bankruptcy might help some workers in Washington

Even though the Great Recession was supposedly over in 2009, the average worker has reportedly still been struggling to manage a limited income and growing debt. There may be many families here in Washington who feel trapped by their debt burdens while trying to provide the necessities. After a recent study that analyzed the rate of wage garnishments, a Chapter 7 bankruptcy might provide needed relief for some.

The study set out to determine how debts are affecting workers' take home pay. The report, which was conducted by a payroll company, revealed that approximately 10 percent of Americans were under wage garnishment orders last year. More than 40 percent of these were in place to collect money for court-ordered child support. The study encompassed wage data for more than 13 million employees.

The next highest category for which wages were attached was educational, medical and consumer debt. It was estimated that 33 percent of the money being diverted was to pay these types of debts. It was also discovered that the workers who were mostly described as blue-collar, were more likely to have wages seized for credit and medical debts rather than child support. In general, the lower wage earners were more likely to struggle to pay debts and were more likely to be under garnishment orders.

This may set-up a scenario that could cost an employee a job due to lack of resources caused by the garnishments. There may be Washington families facing this looming financial disaster because their wages have been attached. While obligations such as child support and student loans are not dischargeable in a Chapter 7 bankruptcy, filing for this protection may free up enough of their resources to find breathing room in strained budgets. Professional assistance is available for those considering whether this option would work for them.

Source:, "One in 10 Americans' paychecks get docked to pay off debts", Priya Anand, Sept. 16, 2014

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