Wage garnishment is a legal process that allows a creditor to take a portion of a person’s wages directly from their employer in order to pay off a debt. It can be a stressful and financially difficult experience, as it significantly reduces a person’s take-home pay. If you are facing wage garnishment and are struggling to make ends meet, you may be wondering if bankruptcy can help stop it.
Can Bankruptcy Prevent Wage Garnishment?
The short answer is yes, bankruptcy can stop wage garnishment in most cases. When you file for bankruptcy, an automatic stay goes into effect. The automatic stay is a legal injunction that prevents creditors from taking any collection actions, including wage garnishment. This means that if you are currently having your wages garnished, it should stop once you file for bankruptcy.
There are a few exceptions to this rule, however. Some types of debts, such as child support and alimony payments, are not covered by the automatic stay and can continue to be garnished even after you file for bankruptcy. In addition, the automatic stay does not apply to certain government agencies, such as the Internal Revenue Service (IRS) and state tax agencies, which can continue to garnish your wages for unpaid taxes.
If you are facing wage garnishment and are considering bankruptcy as a way to stop it, it’s important to understand the different types of bankruptcy and how they can help. There are two main types of bankruptcy: Chapter 7 and Chapter 13.
Chapter 7 Bankruptcy
Chapter 7 bankruptcy, also known as “liquidation bankruptcy,” is designed for individuals who do not have the ability to pay off their debts. In a Chapter 7 bankruptcy, the court may sell off your non-exempt assets in order to pay off your debts.
If you do not have many assets, or if your assets are protected by exemptions, you may be able to keep them. Chapter 7 bankruptcy can help stop wage garnishment and other collection actions, and it can also discharge many types of unsecured debts, such as credit card debt and medical bills.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy, also known as “reorganization bankruptcy,” is designed for individuals who have a regular income and the ability to pay off some of their debts over time. In a Chapter 13 bankruptcy, you will propose a repayment plan to the court that outlines how you will pay off your debts over a three to five-year period.
During this time, your wages will not be garnished, and you will make payments to a bankruptcy trustee who will distribute the funds to your creditors. Chapter 13 bankruptcy can also help stop wage garnishment and other collection actions, and it can also help you catch up on missed mortgage or car loan payments.
Let Lincoln-Goldfinch Law Represent You
If you are facing wage garnishment and are considering bankruptcy as a way to stop it, it’s important to speak with a bankruptcy attorney to determine which type of bankruptcy is right for you. An attorney can help you understand the pros and cons of each type of bankruptcy and help you decide which option is best for your individual situation.
Bankruptcy can be a powerful tool for stopping wage garnishment and other collection actions. If you are struggling with debt and are considering bankruptcy, it’s important to speak with a bankruptcy attorney. With the right guidance and support, bankruptcy can provide the financial fresh start you need to get back on track and move forward with your life.
Lincoln-Goldfinch and its team of experienced bankruptcy attorneys have been helping people get a chance for a new financial start. The firm assists clients to determine a solution that can give them the most benefit. Let Lincoln-Goldfinch represent you and get relief from overwhelming liabilities.