Should You File Bankruptcy To Stop Wage Garnishments?

If a creditor gets the approval from a court to garnish your wages, you will suddenly start receiving paychecks that are less than what they should be. Wage garnishment is a common tool used by creditors to collect money from people that will not pay, and it can be very hard to stop a wage garnishment once it has started. You can either let it run its course until the debt is paid in full, or you could consider filing Chapter 7 bankruptcy. 

How can bankruptcy stop wage garnishments?

When you file for bankruptcy and the bankruptcy court receives your petition, the court will issue something called an automatic stay. This is a tool that is designed to protect you while you go through the bankruptcy process, and it forces your creditors to stop collection efforts on the debt you owe.

This will force a creditor to stop a wage garnishment that is currently in place, and it will stop all creditors from:

  • Calling you to collect the debt
  • Sending you letters
  • Sending statements for the debt you owe
  • Turning debts over to collection agencies

Unfortunately, though, this automatic stay is not permanent, and it will not stop all wage garnishments.

What are the limitations of the automatic stay?

If you currently have child support payments taken out of your paychecks, this will not stop. Child support is one type of debt you cannot get around paying, no matter what you do. The automatic stay will stop almost all other types of wage garnishments, including garnishments for tax debts.

During the bankruptcy process, your attorney will help you understand what debts will be discharged in the bankruptcy and which will not. If the garnishment you have is for a debt that can be discharged, the creditor will not be able to garnish your wages in the future for this particular debt. This creditor will no longer have the right to come after you for this debt in any way.

If a debt cannot be discharged, the automatic stay will eventually end, and the creditor will once again have the right to garnish your wages or collect the debt with other methods.

How can you tell if bankruptcy is the right way to stop wage garnishments?

Bankruptcy can be helpful for putting a stop to wage garnishments, but there are many other things to consider before you file. Visiting an attorney (such as one from Smith & Weer PC) is a great way to find out if this is the right route for you to take. Your attorney will examine all your financial information, including every debt you owe.

Once this is done, your attorney will be able to explain what the best option is for you. If the attorney recommends filing for bankruptcy, you may want to consider going through with this. To learn more, make an appointment with a bankruptcy attorney today.