Garnishing the wages of someone struggling financially seems like adding salt to a wound. It’s painful. Not only are you dealing with mounting debt, but now your monthly income is being reduced. However, it’s legal for a creditor to obtain a court judgement approving wage garnishment, resulting in less money in your pocket, tarnishing your employer’s view of your financial responsibility and negatively impacting your credit. Can bankruptcy help? The straight answer is maybe. Here’s why.
Chapter 7 Protections
If you file Chapter 7 Bankruptcy, the Automatic Stay provision of the Bankruptcy code protects you from creditors trying to garnish your wages. They must stop all garnishments. In some cases, even wages that have already been garnished may be recovered. However, Chapter 7 does not protect you from non-dischargeable garnishments, such as child support or alimony. These are considered priority debts that are not dissolved under Chapter 7.
Once your bankruptcy is over and the final discharge order is issued by the Court, creditors can no longer collect debt from you. You are protected from any future garnishments from former creditors. The only exception is the above-mentioned non-dischargeable garnishments. These debts can still be legally collected after Bankruptcy.
How an Attorney Can Help
When your wages are being withheld, time is most likely your top priority. Getting cash flowing again is most important. However, the bankruptcy process can be slow. To file for bankruptcy, you must provide your attorney with a list of all your creditors. This is so they can all be notified that you have filed Chapter 7. However, the method of communication used by the Court is U.S. mail. It may take time for the Court to get the notifications out and for them to reach the creditor and get processed. Having an effective attorney to advocate for you can help speed up the process. An experienced attorney can provide the notice of bankruptcy directly to your creditors, your payroll department or the levying officer so the garnishment gets stopped immediately.