You do not have to live in fear of creditors. As a Bartlett bankruptcy attorney, I meet with many people who are in fear of creditors. As long as the creditor has not brought you to court, you do not have to fear that your wages are going to be garnished or that your bank account is going to be frozen, unless of course if you have signed a voluntary wage assignment with one of your creditors. It is becoming more and more common these days for people to give creditors the authorization to deduct a certain dollar amount out of a bank account or to deduct a certain dollar amount per pay period out of wages. I always caution my clients as a Chapter 13 bankruptcy lawyer not to give creditors the authority to enter into your account. If you desire to work out a payment plan with a creditor, that is fine. There is nothing wrong with working out a deal, avoiding bankruptcy, and repaying either all or a portion of your debt without the use of the federal bankruptcy system. However, if you do that, I recommend that you make voluntary payments pursuant to a written schedule. I do not recommend that you take the creditor’s recommendation that you allow them to enter into your account on a particular schedule. This is more than just sound bankruptcy advice. This is advice that I would recommend to anyone who owes a debt.
There are several reasons why I don’t recommend this scenario. First, you don’t have control of your account if you’re allowing creditors to tap into your account to get a deduction. Second, if you try to stop that deduction, the creditor may or may not abide by your request. If that were to happen, you would only be able to stop it by closing that bank account and opening up another bank account. Lastly, I don’t recommend that you let anybody into your bank account because it makes record keeping very difficult. Many of my clients who are on some sort of automatic deduction, whether it be for cell phone, auto, mortgage, utilities of any sort, do not take good measures with record keeping. They simply rely on the creditor to deduct the proper amount, and the client simply doesn’t keep a good record of the amount being taken or the amount being left in the account. This can then lead to other problems such as NSF checks, bank fees, late charges, and a cascade of other problems that come into hand when you do not keep good records and you do not have knowledge of what is actually in your bank account. This type of sloppy record keeping can actually contribute to you having to file for an individual bankruptcy.