Can Filing for Bankruptcy Stop Your Creditors in Hagerstown, MD from Garnishing Your Wages?
Do you have difficulty paying your bills? If so, a wage garnishment may make your situation worse. However, you can bounce back and prevent your creditors from garnishing your paycheck every month when you file for Chapter 7 bankruptcy. If your creditors are garnishing your wages or you get garnishment-related threats from your creditors, a bankruptcy filing might be the right option for you. A bankruptcy attorney in Hagerstown, MD can help you understand the pros and cons of this bankruptcy and how it applies to your financial situation.
How the Automatic Stay in Bankruptcy Works
When you file for Chapter 7 bankruptcy, the court will order an automatic stay, which prohibits your creditors from collecting your debts, including collection activities such as wage garnishment, while your bankruptcy case is ongoing. However, exceptions apply to the order. Garnishments for obligations like past-due child and spousal support can continue with the automatic stay in effect, and your creditors can ask the court to lift the automatic stay at any point.
How to Stop a Wage Garnishment
Once you file Chapter 7 bankruptcy, the automatic stay automatically goes into effect. But creditors may not be notified right away, and this means they can still withhold a part of your next paycheck. If you don’t want this to occur, your lawyer should notify your employer and creditors about your Chapter 7 claim. After your lawyer has provided the filing date, bankruptcy case number, and court location, the wage garnishment will stop.
What to Expect Once the Bankruptcy Case is Finalized?
If your creditors are garnishing a dischargeable debt in Chapter 7 bankruptcy, such as payday loans, credit card balances, and medical bills, the garnishment efforts will stop once your bankruptcy case ends. However, your lawyer may have to take extra action to deal with a related lien.
If your creditors are garnishing your wages because of back taxes, student loans, and other kinds of debts, a Chapter 7 filing won’t stop the garnishment permanently. Once the case ends, your creditors will be allowed to garnish your wages again. But you can consider filing for Chapter 13 bankruptcy to prevent this from happening.
A Chapter 13 repayment plan can include debts that a Chapter 7 filing cannot discharge. Your lawyer can ensure you make affordable monthly payments, and you don’t need to worry about wage garnishment when you adhere to the established payment plan.
