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Bankruptcy Can Stop Wage Garnishment

Debt itself may put a strain on daily finances. When you lose part of your income, however, it can become even harder to support yourself and your family. If a court has ordered your employer to withhold a percentage of your paycheck to settle a debt, contact Dixon & Johnston Law Office.

Our team of Illinois bankruptcy attorneys can help fight wage garnishment. Filing bankruptcy can result in an automatic stay, forcing your employer to stop garnishing wages in many cases. Call or visit our office to discuss your options and learn how we can help.

How Wage Garnishment Works

Wage garnishment is the result of a court order against a debtor that requires his or her employer to withhold earnings and send them directly to a creditor. Garnishments typically last until the debt in question is settled.

Courts can order wage garnishment for child support, taxes, student loans and any other debts included in a collections lawsuit. There are limits to how much one’s employer can garnish. But that may be little solace if the resulting take-home pay is not enough to cover expenses. Dixon & Johnston Law Office can help protect you from this overwhelming consequence.

Use The Automatic Stay To Protect Income

Filing bankruptcy causes a court-ordered automatic stay to go into effect. This injunction prohibits most creditors from collecting debts, including through wage garnishment. The court will notify creditors of the stay, while you may also alert your employer’s payroll department of the bankruptcy filing.

An automatic stay typically remains in place until the debtor receives a bankruptcy discharge, which often ultimately erases all debts. Creditors will not be able to resume collection activities for any debts included in the discharge.

Bankruptcy Will Not Stop All Wage Garnishments

An automatic stay does not apply to all creditors and types of debt. Individuals who owe past due child support or alimony and file a Chapter 7 bankruptcy case can still have their wages garnished for current support. These priority debts are considered nondischargeable. Chapter 13 cases differ slightly. Wage garnishment will cease in Chapter 13 bankruptcy cases, but debtors must pay all obligations within a three- to five-year period.

In some instances, an automatic stay will be brief or not awarded. If an individual has filed bankruptcy and the case was dismissed within one year of the new filing, an automatic stay will only last for 30 days. Additionally, if someone has filed bankruptcy twice in the previous year, an automatic stay will not be automatically granted. However, you should still contact us. We can help present your case to the court in an attempt to have the stay imposed.

What Happens To Your Wages After Bankruptcy

At the end of bankruptcy, the automatic stay also ends at the same time. This means that any existing wage garnishment would resume for debt that is left over after your bankruptcy case.

However, most bankruptcy cases involve the discharge of debts such as medical bills and credit card debt. If the debt that caused wage garnishment is discharged in bankruptcy, the creditor will not continue garnishing your wages.

Contact Dixon & Johnston Law Office To Learn Your Options

If you are being threatened by wage garnishment or your earnings are already being withheld, contact Dixon & Johnston Law Office. We can help you understand your options and explain how filing bankruptcy can help stop your creditors’ actions. Our skilled team of bankruptcy lawyers in Belleville is ready to help, so call us today.