There are certain debt situations and debtors that have the unique permission to be able to garnish people’s wages when they cannot pay their bills. It isn’t as common as it used to be, but it does still happen regularly. In fact, it is so common that a lot of people are starting to ask if bankruptcy might be the solution here. Of course, that’s a question that doesn’t really have a simple answer. The easier question is whether bankruptcy stops wage garnishments.
And the answer is yes, usually. In most cases, filing bankruptcy will create a “stay” that prohibits anyone from carrying on their collection efforts during the entirety of the bankruptcy process. They will have to wait until the bankruptcy has been discharged and at that point, the creditors will have their debts written off as part of the process. If a debt isn’t written off, there may still be recourse once the case is over, but that’s rare.
What Is Wage Garnishment? Is It Legal?
Wage garnishment is a means of recovering debts through the court system. Certain creditors are permitted to file claims to garnish wages against those who have unpaid debts. This is a process that must be done through the courts and anyone attempting to garnish wages otherwise is doing so illegally. Multiple creditors may be attempting to garnish your wages, and that can add up quickly.
Plus, this process does not look great to employers because it shows them a sense of financial irresponsibility. Even if the circumstances that led you here are valid and not your fault, it still looks bad to have creditors calling you at work or trying to take your wages. When employers get irritated, people get fired. Then, the cycle continues. That’s why it’s best to solve debt problems quickly and stop wage garnishments sooner than later to save everyone the troubles.
How Does Bankruptcy Help?
Once a bankruptcy case is filed with the courts, there is an automatic stay put into place on all wage garnishments that aren’t related to child or domestic support. This also applies to all collections, although it may or may not apply to your car loan or mortgage, depending on the specific circumstances of your case. While lenders that hold car notes and mortgages do tend to be more forgiving, they may also still continue to attempt to recoup the payments they are due even after your case has been filed. If this happens, contact your lawyer and ask them whether you should do anything, or how to proceed.
Back to the point, bankruptcy helps because it almost always stops wage garnishments in their tracks. That gives you an average of 3-6 months to get through the process and then, in many cases, the debt will be written off entirely. That will leave you with no garnishments and no debts, as well as no harassing phone calls and emails that demand payment.
You might even be able to recover lost wages if you file within the first 90 days of the garnishment starting. This will only apply for a limited time and a certain amount of money, but something is better than nothing. As with anything related to financial law, your best option is to hire a reputable lawyer who can assist with the entire bankruptcy process and help you find a better way to get your finances on track. They’ll also be able to help you better understand your options with wage garnishments and how you can recoup the maximum earnings, and more.
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