If you have fallen behind on your bills and are struggling to make ends meet, you’re not alone. In 2018, there were 461,897 Chapter 7 bankruptcy filings and 288,272 Chapter 13 filings. Plenty of people find themselves in positions where they need to make a quick decision to put a stop to creditor harassment and to prevent the garnishment of their wages. That’s where bankruptcy can come in to help.
Bankruptcy can stop your wages from being garnished, which is helpful if you’re looking to get a fresh start but still need to maintain your home or necessities. As soon as your bankruptcy is filed, the garnishments should stop. Here’s how it works.
Understanding wage garnishment
Wage garnishment is when a court order has been issued to your employer that tells them to send a specific amount of money to a creditor each time you’re paid. They take this amount out of your paycheck and use it to repay what you owe.
Many kinds of debts can be paid through wage garnishments, such as:
- Student loans
- Personal loans
- Child support
- Credit card debts
- Medical bills
Creditors usually have to sue you before a wage garnishment is ordered. So, you should have received a notice of a hearing prior to the garnishment appearing on your wages. Sometimes a hearing isn’t needed, though, such as if the debt is for student loans, child support or your taxes.
How can you stop wage garnishment with bankruptcy?
When you file for bankruptcy, most kinds of wage garnishment stop. Additionally, new creditors may not be able to seek garnishment orders against you. The reason for this is because of the automatic stay. An automatic stay prevents collections agencies, some government entities and creditors from trying to pursue debts while the bankruptcy is in progress. This stay starts the moment the bankruptcy is filed.
Your attorney will reach out to each of the creditors to make them aware of the stay and to let them know that they need to stop garnishing your wages immediately. If they don’t stop, then they could face charges for contempt.