If your wages have been garnished, then you may not be getting your full paycheck. You may find it hard to pay what you need to cover in living expenses or other bills as a result of the garnishment, which puts you in an even more difficult financial position.
The good news is that bankruptcy can help you stop or prevent wage garnishment, so that you can get your finances back in good order. Bankruptcy immediately enacts an automatic stay, and that automatic stay forces creditors to stop garnishing your wages in most cases.
How does the automatic stay protect your income?
An automatic stay protects your income by stopping all foreclosures, wage garnishments and collections activities immediately pending the bankruptcy. The court-ordered automatic stay stops most creditors from trying to collect (or continuing to collect) debts. This includes continuing to collect a debt through wage garnishment or bank account garnishment.
In the majority of cases, the automatic stay will be in place until your bankruptcy is discharged. At that time, people usually find that their remaining debts are discharged and no longer need to be paid.
Are there exceptions to the automatic stay?
Yes, there are exceptions to automatic stays. They don’t apply to all types of debts, such as alimony, child support or federal tax debts. In other cases, the automatic stay may be granted initially, but it may be short-lived. For instance, if you’ve previously filed for bankruptcy and it was dismissed within the last 12 months, your automatic stay will only be for 30 days, unless the court grants an extension which can normally be accomplished through the help of your bankruptcy attorney.
Dealing with wage garnishment can be frustrating, but there are potential solutions. If you’re given a notice of wage garnishment, it’s worth looking into bankruptcy to see if it could be a good option for you.