Having unpaid debt can be overwhelming.
As debts pile up, creditors can gain court orders to begin to garnish your wages—only making your financial problems worse.
This means that your employer will withhold a percentage of your pay and send it to the creditor.
In the case of certain debts like taxes, child support, or student loans, creditors can even force your employer to withhold a portion of your paycheck without a court order.
It is possible to protest a wage garnishment, but this requires filing paperwork with the court and scheduling a hearing. A bankruptcy attorney can help you in this process and make sure that you do not make mistakes with your filed paperwork.
For many people, the financial burden becomes so difficult that they begin to think about filing for bankruptcy.
Many clients wonder if bankruptcy can help stop wage garnishment and provide relief to their dire financial situation. Below we will lay out the basic facts you should know about bankruptcy and wage garnishment.
When you file for Chapter 7 or Chapter 13 bankruptcy, the courts issue an automatic stay on all debt collection, foreclosure actions, and some wage garnishments.
An automatic stay means that for the duration of your bankruptcy case, creditors are not allowed to collect, or even pursue their debts.
Any debt collection calls will stop until your case is dismissed. Or, they will stop when debts are discharged after the successful completion of your case.
There are different types of bankruptcy filings, and how your wage garnishment is handled depends on the type of filing.
When filing Chapter 7 bankruptcy, any wage garnishments that are a result of delinquent child support, taxes, or student loans will not be stopped as a result of your bankruptcy filing.
This is because debts such as child support and student loans are considered priority debts. So, they are subject to special treatment in bankruptcy.
However, wage garnishment will likely stop for debts that are outside of this category. They will fall under the automatic stay that is issued once you file for bankruptcy.
Unlike Chapter 7, if you are in good standing with your bankruptcy repayment plans, courts will likely put an end to wage garnishment.
This will assist you in saving up money to pay off debt.
Whether filing for Chapter 7 or Chapter 13, it is wise to hire a qualified, experienced bankruptcy attorney. They will ensure that you receive what you are entitled to.
Bankruptcy is a great choice for many who are facing hardship with their finances. Putting an end to wage garnishments can help put you on the path toward financial freedom.
With Parker & DuFresne, we not only handle your case, we will give you the knowledge, the tools, and the motivation to rebuild your credit and renew your financial outlook
With our attorneys at your back, you can move smoothly through this lengthy process. Contact us today for a free consultation.
Parker and DuFresne