Chapter 7 Bankruptcy Stops Wage Garnishment

If your wages are being garnished, or you know they will be, filing an Elkhorn Chapter 7 Bankruptcy will most likely stop the wage garnishment. An Elkhorn Chapter 7 Bankruptcy stops most wage garnishments because the moment you file a bankruptcy petition, an automatic stay immediately goes into effect. The bankruptcy laws are designed to protect you, and an automatic stay does just that.


What Is An Automatic Stay?

Elkhorn Chapter 7 Bankruptcy stops wage garnishmentsAn automatic stay protects you from creditors. The bankruptcy law requires most creditors to stop all collection activities against you during the automatic stay because your monies, assets, and property are now part of the bankruptcy estate and some portions may be exempt under bankruptcy law. Creditors are not allowed to garnish your wages, attach liens to your property, repossess assets, foreclose on your property, call you, or send you collection letters during the automatic stay.

It is important to note that not all collection activities are subject to the automatic stay. There are certain collection actions that may still proceed during an automatic stay. These may include: criminal actions, child support, certain evictions, certain taxes, court proceedings for traffic violations, domestic violence issues, divorce proceedings, spousal support payments, and paternity law suits.

You also may be given a shortened automatic stay or no automatic stay at all if you have filed multiple bankruptcy petitions in a short period of time. If you filed for Chapter 7, 11, or 13 Bankruptcy during the past year, and the bankruptcy was dismissed, the automatic stay will end in 30 days. However, you can submit a good faith motion to the bankruptcy court to extend the automatic stay. If you had two pending bankruptcy cases in the past year, the automatic stay will not be issued at all. If this is your second bankruptcy within a year, talk to your Elkhorn Chapter 7 Bankruptcy attorney to learn more about filing a motion to extend or initiate your automatic stay.

It is possible for a creditor to ask the bankruptcy court to lift the automatic stay. Creditors who have liens on your property are the creditors most likely to ask the bankruptcy court to remove the automatic stay, although any creditor has the right to ask the bankruptcy court to remove it. The creditor must show good cause for requesting that the automatic stay be lifted.


How Do the Appropriate People Know to Stop Garnishing My Wages?

When you complete your Elkhorn Chapter 7 Bankruptcy petition, you will list all of your creditors, along with their addresses. Each creditor that you list will be notified by the bankruptcy court that you have filed for an Elkhorn Chapter 7 Bankruptcy and that an automatic stay is immediately in effect. The creditor must then make every effort to stop all collection activities, including your wage garnishments. Because the court will notify all creditors, you do not have to do anything, but you can always send a copy of your court stamped bankruptcy filing to the creditor garnishing your wages, the sheriff’s office, your payroll department, and any bank processing your wage garnishment.


What If My Wages Are Garnished After Filing An Elkhorn Chapter 7 Bankruptcy?

This should never happen, but if it does, notify your Elkhorn Chapter 7 Bankruptcy attorney immediately. The bankruptcy court may penalize creditors who violate the automatic stay and do not return the property or monies seized. You may be rewarded damages and attorney fees if a creditor violates an automatic stay and you win a court hearing against them.


If I File an Elkhorn Chapter 7 Bankruptcy, Can I Get Back Wages Garnished Before I Filed?

It may be possible to retrieve wages which were garnished prior to filing an Elkhorn Chapter 7 Bankruptcy. If certain criteria are met, you could be refunded wages garnished within 90 days prior to your bankruptcy filing. Speak with your Elkhorn Chapter 7 Bankruptcy attorney to find out if you meet all criteria and if this is a wise decision for you.


Once My Elkhorn Chapter 7 Bankruptcy Case is Finished, What Happens to My Wage Garnishment?

Once your Elkhorn Chapter 7 Bankruptcy case is heard before the bankruptcy trustee and completed, the automatic stay ends. If the debt that was being recovered by means of wage garnishment is wiped out during the bankruptcy proceeding, then the creditor cannot continue to garnish your wages. This will most likely be the case. However, if your bankruptcy case is dismissed or the debt being recovered by means of wage garnishment is not wiped out during the bankruptcy proceeding, then the creditor can continue to garnish your wages.


Speak with an Experienced Elkhorn Chapter 7 Bankruptcy Attorney

Wynn at Law, LLC has a 100% bankruptcy success rate. If you are struggling financially and need to stop wage garnishments, an Elkhorn Chapter 7 Bankruptcy may be right for you. Our knowledgeable Elkhorn bankruptcy attorney can discuss with you ways to stop wage garnishment with and without bankruptcy. Contact our Elkhorn bankruptcy attorney to discuss all of your options by calling 262-725-0175 or by visiting our website’s contact page.


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*The content and material on this web page is for informational purposes only and does not constitute legal advice.

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