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How Can Wage Garnishments Be Halted Using Chapter 7 Bankruptcy?

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What is Wage Garnishment?

If you owe a creditor, they can contact your employer under a court order to skim your wages before the payment reaches you. Once wage garnishment starts, it’s difficult to stop it unless you file for bankruptcy. However, it’s crucial to understand how bankruptcy will affect the garnished debt. Experienced bankruptcy lawyers in California can provide the legal guidance you need.

Common debts often resolved through wage garnishments include alimony, student loans, income tax, and child support. Each is governed by different rules and affected differently in bankruptcy. For example, you may need to file for modification with a family court for alimony and child support instead of bankruptcy.

Does Bankruptcy Stop Wage Garnishment?

With a wage garnishment order, your employer must withhold and direct a portion of your wages toward your debt repayment. Employers mostly garnish up to 25% of the disposable; the garnishment could be higher in some circumstances.

Filing for bankruptcy has the potential to stop wage garnishments in some situations. An automatic stay will become effective after filing the bankruptcy petition. An automatic stay is a court order that stops most creditors from continuing with activities tailored for debt collection, including wage garnishment.

How Can I Stop Wage Garnishment Through Bankruptcy?

A significant consideration to make when filing for bankruptcy to stop wage garnishment is the type of bankruptcy to use. Filing for Chapter 13 bankruptcy stops all wage garnishments, even for non-dischargeable debts such as alimony and child support.

However, once the bankruptcy period is complete, the debts won’t be forgiven, and you must repay them as part of the repayment plan under Chapter 13. When you file for Chapter 7 bankruptcy, much of what you owe can be discharged, and all garnishments based on the debts must be stopped.

Nonetheless, you can’t discharge certain debts through Chapter 7 bankruptcy, especially child support and alimony. Consult Chapter 7 bankruptcy attorneys in Downey to help you evaluate your options.

Chapter 7 Bankruptcy and Wage Garnishment

Once the automatic stay is triggered when you file Chapter 7 bankruptcy, creditors can’t take further action against you. You can address your financial situation without the pressure of wage garnishment or creditor harassment.

Additionally, filing for Chapter 7 bankruptcy offers the possibility of discharging unsecured debts such as medical bills, credit card debt, and personal loans. Once you discharge these debts, you can free up resources to meet essential living expenses and regain financial stability.

Chapter 7 bankruptcy also provides exemptions allowing you to retain essential assets such as your primary residence, retirement accounts, and personal property. Consult Chapter 7 bankruptcy lawyers in California to understand whether the exemptions apply to your case and what relief that can give you.

What Are the Steps for Filing for Chapter 7 Bankruptcy?

Filing for Bankruptcy can be complex and involving, given the legal proceedings that pertain to your debts. Retaining skilled California Chapter 7 bankruptcy would work to your advantage as they ensure you’re well informed at each stage. Here are the steps you need to complete when filing for bankruptcy:

  • Gather the relevant documents: You must present your financial documents when filing for bankruptcy. These include pay stubs, recent bank statements, retirement account statements, and other proof of income.
  • Go for credit counseling: Whether you file for Chapter 7 or 13 bankruptcy, you must undertake a credit counseling course from a provider approved by the Department of Justice
    Fill out the necessary paperwork: A lot of paperwork is involved when filing for bankruptcy, and your California bankruptcy lawyers can ensure you furnish all the required details and navigate the process correctly.
  • Obtain a case number: After paying the necessary filing fee and filing your bankruptcy petition, you will receive a case number and an official court stamp.
  • Notify your creditors: The next step is to contact your creditors and any attorneys involved in filing a wage garnishment against you. Your lawyers can send them a copy of the bankruptcy petition, alongside the earnings withholding order (EWO) from your employer, requesting that your employer halts the garnishment.
  • Send a notice to the sheriff: The sheriff should have been notified when the original EWO was put in place and should, therefore, be notified when it’s time for the garnishment to end.
  • Talk to the payroll department: Your employer will only stop garnishing your wages once they receive a notice from the sheriff. However, you may notify the payroll department as they await the communication.

These steps may vary case by case, so working with skilled Chapter 7 bankruptcy attorneys in California is best. They could even advise you about other options to stop wage garnishment without bankruptcy.

What Other Options Do I Have for Stopping Wage Garnishment?

You can end wage garnishment without filing for Chapter 7 bankruptcy, especially because some debts won’t be discharged through bankruptcy. You can explore other options such as:

  • Paying off the debts or settling on a reduced, single lump-sum payment through trusteeship
  • Challenging the wage garnishment order
  • Filing an exemption for hardship
  • Filing a head-of-household exemption

An Experienced Bankruptcy Attorney Helping You Avoid Wage Garnishment

If you fall behind in debt repayment or experience financial hardship, consider filing for Chapter 7 bankruptcy. The option can help discharge some of your debts, but you may still be tied down with student loans, child support, and alimony debt. Consult skilled bankruptcy lawyers in California to help you evaluate your legal options.

The Resolve Law Form has reputable Chapter 7 bankruptcy attorneys who can provide legal counsel and representation. We can help you file for bankruptcy to stop wage garnishments and inform you of your rights and potential options to defend yourself if you can’t keep up with your debt obligations. Call us at 213-583-5547 to schedule a FREE 30-minute consultation

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