One of the biggest benefits of filing for bankruptcy is the automatic stay. This is especially the case if you are experiencing wage garnishment. Continue reading to learn what an automatic stay is and how an experienced Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can work to stop the garnishing of your wages.

What is an automatic stay?

As soon as you file for bankruptcy, the New York bankruptcy court will issue an injunction, otherwise known as an automatic stay, on all your creditors and collection agencies. With the issuance of an automatic stay, lenders will be prohibited from any collection activities until your bankruptcy proceedings are complete.

How can an automatic stay stop wage garnishment?

One of the collection activities that lenders will be denied is the garnishment of your wages. Meaning, lenders usually attempt to get court-ordered deductions from the pay you receive from your employer.

In this way, lenders collect the money that you owe for certain debts or legal obligations. Examples of why they may take from your wages are to pay off your outstanding child support bills, medical bills, or court fees, along with your unpaid taxes, credit card debt, student loan debt, or otherwise.

But with an automatic stay, your employer will no longer have to withhold your pay. You can then use your full pay toward your bankruptcy repayment plan.

What are the other benefits of an automatic stay?

In addition to eliminating wage garnishment,many other benefits comee with an automatic stay. Primarily, this injunction will allow you to keep your home and protect it from foreclosure, at least until your bankruptcy proceedings are complete. This is even possible if you file on the date of your foreclosure.

Other benefits that come with an automatic stay include the following:

  • Lenders will no longer be able to file lawsuits against you.
  • Lenders will no longer be able to place restraints on your bank accounts.
  • Lenders will no longer be able to send collection letters to you.
  • Lenders will no longer be able to make incessant collection calls.
  • Lenders will no longer be able to repossess your assets.

Rest assured, an automatic stay will provide you with some relief during this difficult financial time. It gives you a moment to properly plan how you are going to pay off your debts, and in a timeline that best fits your current financial situation.

Overall, filing for bankruptcy may be one step closer to financial independence. So if you are still wondering whether this is the right step for you, contact a skilled Jefferson County, Kentucky bankruptcy lawyer today.