When it comes to financial difficulties, wage garnishment can be one of the most difficult and stressful experiences. It can be difficult to manage your finances when a portion of your paycheck is taken away each month. Fortunately, filing for bankruptcy can be a powerful tool to stop wage garnishment and get your finances back on track.
What is Wage Garnishment?
Wage garnishment is a legal process in which a creditor can take a portion of your paycheck to satisfy a debt. The creditor must first obtain a court order to garnish your wages, and the amount taken from your paycheck is determined by the court. Wage garnishment can be used to collect on unpaid taxes, child support, student loans, and other types of debt.
How Can Bankruptcy Stop Wage Garnishment?
When you file for bankruptcy, an automatic stay is put in place. This means that creditors are no longer allowed to contact you or take any action to collect the debt. This includes wage garnishment. As soon as you file for bankruptcy, the creditor must stop garnishing your wages.
In some cases, the creditor may be able to file a motion to lift the stay and continue garnishing your wages. However, this is rare and usually only happens if the creditor can prove that the garnishment is necessary to protect their interests.
What Types of Bankruptcy Can Stop Wage Garnishment?
The type of bankruptcy you file will determine how long the stay will last and whether or not the creditor can file a motion to lift the stay.
Chapter 7 bankruptcy is the most common type of bankruptcy and it provides the most protection from wage garnishment. The stay will last until the bankruptcy is discharged, which usually takes about three to four months. During this time, the creditor cannot take any action to collect the debt, including wage garnishment.
Chapter 13 bankruptcy is another option to stop wage garnishment. With Chapter 13, the stay will last until the repayment plan is complete, which can take up to five years. During this time, the creditor cannot take any action to collect the debt, including wage garnishment.
What Happens After Bankruptcy?
Once the bankruptcy is discharged, the creditor will no longer be able to garnish your wages. However, it is important to note that the debt is not necessarily forgiven. Depending on the type of bankruptcy you file, you may still be responsible for paying back the debt.
In Chapter 7 bankruptcy, most unsecured debts are discharged and you are no longer responsible for paying them back. In Chapter 13 bankruptcy, you will be required to pay back a portion of the debt through a repayment plan.
Conclusion
Filing for bankruptcy can be a difficult decision, but it can also be a powerful tool to stop wage garnishment and get your finances back on track. Bankruptcy can provide a fresh start and protect your wages from creditors. It is important to understand the different types of bankruptcy and how they can help you stop wage garnishment. With the right information and guidance, you can make the best decision for your financial future.
