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Can you protect yourself against wage garnishment with bankruptcy?

On Behalf of | Mar 9, 2022 | bankruptcy |

If you are unable to pay back debts that you owe, there is a risk that you could face a loss of income through wage garnishment. Wage garnishment generally occurs after a court judgment is entered against you. A creditor is then able to receive payments directly out of your paycheck.

Your employer will be notified about the wage garnishment in most cases. They’ll be obligated to hold a portion of your wages out to repay the debt by order of the court. There is a limit to how much they can take from you at once. Usually, this is no more than 15% of your disposable income.

Fortunately, you do have the option of stopping a wage garnishment. You can do so by filing bankruptcy, which will help you obtain an automatic stay.

Stopping wage garnishment with bankruptcy

Wage garnishment can be stopped with bankruptcy by using an automatic stay. When you file for bankruptcy, the automatic stay goes into place immediately. All garnishments will need to stop at that time. While some kinds of garnishments may continue, such as those for child support or other protected, secured debts, other forms may be discharged in bankruptcy.

To make it easier to understand, for most unsecured debts, a discharge of that debt will also result in the end of a wage garnishment.

If you face a wage garnishment order, make sure you take action

Wage garnishment orders can be stopped once they’re in place, but it’s better to fight them before they are. If you’re struggling with debt, now is a good time to look into your options for repaying them or erasing them, so you can move on with a more secure financial future for yourself and your family.