Stop Wage Garnishment with Bankruptcy
If creditors are garnishing your wages, you may be able to put a stop to it by filing for bankruptcy. Doing so may even allow you to recoup already-garnished wages through a bankruptcy filing. As always, exceptions apply. Follow this easy guide to understanding wage garnishments and bankruptcy.
NOTICE: If you are currently experiencing wage garnishment or you have recently been notified that a wage garnishment is on the horizon, it is important to act quickly and contact an experienced bankruptcy lawyer as soon as possible.
About Wage Garnishment
There are a number of ways that a creditor will go about attempting to collect payment on a delinquent debt, one of which involves wage garnishment through a court order. This course of action gives a creditor money from your paycheck automatically in order to fulfill your debt. Although wage garnishment is beneficial in that you are satisfying the debts you owe, it can put you in an even more difficult situation than you were in prior to the garnishment.
Without your complete paycheck, you might struggle to provide financially for yourself and your family on a daily basis. You may find yourself using credit cards or taking out high-interest personal loans in order to pay bills and put food on the table, but you risk falling into the same cycle of debt that put you in this position in the first place. If garnishment is taking more than you can afford to pay, it might be the right time to consider filing for bankruptcy.
Bankruptcy and the Automatic Stay
Filing either a Chapter 13 “adjustment of debts” or a Chapter 7 “straight bankruptcy” imposes an “automatic stay” on your credits. At its core, the automatic stay prevents further collection of nearly all of your debts. Some rare exceptions include restitution and criminal fines as well as most spousal and child support as they are considered priority debts and are unaffected by bankruptcy filings. The moment you file for bankruptcy, your creditors can no longer collect on your debts, although they may attempt to petition the court to lift the stay. However, this request is only granted under certain circumstances.
In nearly all cases, creditors are unable to garnish your paycheck unless they first file and win a lawsuit against you, get a judgment in their favor, and finally get a court order for wage garnishment in order to collect the judgment. By filing for bankruptcy, you are ultimately preventing the lawsuit from turning into a judgment, and without a judgment, your creditors can’t garnish your wages.
Wage Garnishment Prior to Filing for Bankruptcy
Under certain conditions, you may be able to file for bankruptcy and recoup previously-garnished wages. Typically, wages garnished within 90 days prior to your filing that amount to $600 or more may be returned to you under the condition that you have enough exemptions to cover them. However, if you are considering this course of action, it is critical to do the math on whether it makes the most financial sense when you take into account the additional attorney fees you may incur.
Stop Wage Garnishment Today
Although bankruptcy filings immediately put an automatic stay in place and stop all collection efforts, you may still experience wage garnishment until you notify all of your creditors. To stop a wage garnishment immediately, notify your employer’s payroll department of the bankruptcy. You should also notify your local sheriff’s office since they typically handle and serve wage garnishment orders.
Take Action Immediately
Wage garnishment doesn’t just happen without any warning; consumers must be notified prior to a wage garnishment is put into motion. If you have received any notification of an upcoming wage garnishment, it is important to take action as soon as possible. The sooner you seek assistance from an experienced bankruptcy lawyer, the better off you will be.
Here at Burr Law Office, our team of attorneys works closely with each of our clients to discuss the course of action that will yield the most favorable results. Whether we recommend a bankruptcy filing in order to put a stop to the collection actions against you or we determine that another avenue of resolution is in your best interest, we determine the actions for you based on your specific needs and individual case. With 23 years of experience, the lawyers at Burr Law Office are here to help you make the best decision possible. Call us today at (262) 827-0375 to schedule your free initial consultation.
