How to Stop Wage Garnishment Through Bankruptcy
Nov. 25, 2019
Wage garnishment will only add more stress to your financial situation. How can you regain control of your finances when chunks of your paycheck are taken away every month to repay creditors? There must be a way to make it end, right? Fortunately, there is a way to make it stop. Below we’ll discuss how to stop wage garnishment through bankruptcy.
How Filing for Bankruptcy Stops Wage Garnishment
When you file for bankruptcy, the court will issue an injunction known as an “automatic stay”. Under this legal stay, all of your creditors must stop their debt collection efforts. This includes halting foreclosure, creditor harassment, and wage garnishment.
At a bare minimum, this automatic stay will give you a temporary reprieve from wage garnishment. If you hold debt that is dischargeable through bankruptcy, then it can also provide you permanent reprieve as well, should you follow through and complete the bankruptcy process. Debt that is dischargeable through bankruptcy includes credit card bills, medical debt, and personal loans.
For all other types of nondischargeable debt, such as child support, alimony, student loans and taxes, this automatic stay is only a temporary solution. After you completely the bankruptcy process, you will have to go back to paying off your nondischargeable debt. Which this unfortunately means that your creditors may resume garnishing your wages.
However, if you file for Chapter 13 bankruptcy, then you will have the chance to restructure your debt into a plan that spans three to five years. In that amount of time, you will need to pay back your debt each month. Fortunately, since this type of bankruptcy is ongoing, that means that your automatic stay will continue to fend off wage garnishment as long as you keep up your regular payments.
Can You Reclaim Garnished Wages?
Unfortunately, recovering any garnished wages is most often a futile effort. In order to do so, you must prove that your wages were garnished within 90 days from your filing for bankruptcy. In addition, the amount garnished must adhere to a certain amount and must be exempted by law from bankruptcy. Plus, you’ll have to file a lawsuit against the creditor, which often times costs more than the amount garnished.
Can Creditors Garnish Your Wages After Bankruptcy?
Simply put, no. If you discharge your debt through bankruptcy, then creditors cannot resume garnishing your wages once the bankruptcy is complete.
However, if you hold nondischargeable debt, then your creditors can resume garnishing your wages after bankruptcy because your debt will not be wiped away.
Do I Need a Bankruptcy Attorney to Stop Wage Garnishment?
Creditors will not stop garnishing your wages until they are notified of your filing for bankruptcy. Until they are notified, they can continue to pull money out of your paycheck. So, what an effective bankruptcy attorney can do, among other things, is to notify all your creditors within a speedy manner, as well as your employer, about the automatic stay in place. Once notified, all must stop garnishing wages.
Learn More About Stopping Wage Garnishment
If you are facing financial hardship and want to make wage garnishment stop, then speak to an experienced bankruptcy attorney. Our seasoned legal team at The Sweeney Law Firm, P.C. knows how to stop wage garnishment. Contact us today.