In a recent interview I did with CBS, I revealed how to stop wage garnishment quickly.
When asked to comment, I said,
“When a creditor collects on your debts, they are allowed in most circumstances to garnish the lesser of 10% of your gross wages or 25% of your disposable income to the extent that this amount exceeds 30% of minimum wage. , which can place a financial strain on you and your family. Filing for bankruptcy can quickly shield your income from debt collection.”
An automatic stay, or an injunction, will go into effect immediately after declaring bankruptcy.
When asked to elaborate, I said,
“An automatic stay stops creditors from engaging in collection activities including wage garnishment on all types of debt and applies to your case immediately no matter which type of bankruptcy you file for.”
Creditors will continue to collect until they receive notification of the bankruptcy filing.
“It normally takes the bankruptcy court a few days, up to a week to send information about your case to creditors. So, if there is a garnishment in place or about to occur with respect to one of our clients, our Firm calls and sends proof of the bankruptcy filing to the the creditor, the sheriff’s or marshal’s office, and the client’s employer as soon as the case is filed to make sure that the garnishment is stopped immediately,,” I said.
I added that creditors are legally bound by the automatic stay to stop wage garnishment once made aware of the bankruptcy, even before receiving official paperwork from the court.
The automatic stay terminates once the case comes to a close, or in chapter 7 bankruptcy cases, upon the issuance of a discharge to the debtor.
When asked to elaborate, I commented,
“Credit card companies and unsecured loan creditors cannot collect on debts that have been not been determined through an adversary proceeding in the bankruptcy case to be nondischargeable by the Bankruptcy Court, but there are some types of debt which are not dischargeable in bankruptcy as to which the creditors will be able to resume wage garnishment and other collection activities after the stay terminates, unless the debt has been 100% paid in the bankruptcy ”li.”
I added, “Make sure to speak with a professional bankruptcy attorney if you have questions regarding the effect of Bankruptcy on garnishment.”