You may be made the victim of a wage garnishment if your creditors begin taking money directly out of your paycheck to pay off your past-due debts. This may be greatly unhelpful to your current financial situation, as lesser wages mean fewer funds to pay for your debts and other everyday expenses. Luckily, there may be ways to stop this damaging debt collection strategy, such as filing for consumer bankruptcy. Follow along to find out how a bankruptcy petition might have the power to stop wage garnishment and how a proficient Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help make this work.
Does a bankruptcy petition have the power to stop wage garnishment?
As soon as you submit your bankruptcy petition to the Kentucky bankruptcy court, the judge may issue an injunction or automatic stay. Essentially, an automatic stay prohibits your creditors from initiating or continuing collection activities to pay off your past-due debts. This is all to help you get your financial footing and prioritize your present bankruptcy proceedings. Well, you may rest easier knowing that this automatic stay may include preventing or stopping your creditors from garnishing your wages.
You must understand, though, that it may take the judge a week or more to process your bankruptcy petition and issue this official order to your creditors. Therefore, you may want to inform your employer and your creditors of your bankruptcy filing immediately. This is so you can guarantee the wage garnishment stops by your next paycheck. This may entail sharing evidence of your bankruptcy case number, your bankruptcy filing date, the location of the bankruptcy court where you filed, and more.
What are the exceptions to wage garnishment during bankruptcy?
Unfortunately, you cannot assume that an automatic stay will be applied to your bankruptcy case. This is because your creditors may respond by filing a motion for relief from the automatic stay. Or, the Kentucky bankruptcy court may deem you did not file for bankruptcy in good standing. What’s more, you cannot assume that an automatic stay will be applied for the entirety of your bankruptcy proceedings. That is, the judge may only order it for 30 days if this is your second time filing for bankruptcy within a small window of time.
Lastly, certain debts may not be protected under an automatic stay. For example, your creditors may still garnish your wages if you have court-ordered, past-due domestic support obligations (i.e., child and spousal support payments). The same may apply to money you owe after a criminal proceeding that rules against you.
If you have any further questions or concerns, please do not hesitate to reach out to a talented Louisville, Kentucky consumer bankruptcy lawyer. Schedule your free initial consultation with Schwartz Bankruptcy Law Center today.