When a person does not pay their bills, they can face a variety of penalties. They may face hefty fines, increased interest rates, harassing phone calls from creditors, canceled accounts, and even wage garnishment.
Facing wage garnishment can be a stressful and overwhelming experience. It often leaves individuals struggling to make ends meet, as a portion of their hard-earned income is diverted to satisfy outstanding debts. However, there is a potential solution that can provide relief: bankruptcy. By filing for bankruptcy, you may be able to stop wage garnishment and regain control of your finances. In this blog post, we will explore how bankruptcy can help halt wage garnishment, the process involved, and the key considerations to keep in mind. Whether you’re already dealing with wage garnishment or are concerned about the possibility, understanding the role of bankruptcy can empower you to make informed decisions about your financial future.
Wage garnishment means that money is automatically taken from your paycheck to pay off debts. What happens is that your employer withholds a portion of your wages and pays them toward a debt you owe. Employers will typically garnish 25% of your disposable income, but in some cases, they may take even more. Wage garnishment is often used for child support, alimony, and taxes, but can be used for medical and credit card debt as well.
Can Bankruptcy Help Stop Wage Garnishment?
When people suffer from mountains of debt, bankruptcy is often the first thing that comes to mind. Bankruptcy can be helpful in many situations, but it is not a cure-all that can help with every financial issue. It does have the potential to put a stop to wage garnishment in some cases. This is because once a bankruptcy is filed, an automatic stay will go into effect. The automatic stay is a court order that stops most creditors from debt collection activities, including wage garnishment.
However, bankruptcy may not be able to stop wage garnishment under the following circumstances:
- Child support
- Alimony
- Non-dischargeable debts (such as tax liabilities)
- Multiple recent bankruptcies
Also, if you file a Chapter 13 bankruptcy, you need to make your monthly payments. Failing to do so could cause your bankruptcy to be dismissed. This means wage garnishment could be reinstated.
Do I Need to File for Bankruptcy?
The best way to fight wage garnishment is to file for bankruptcy and hire a lawyer experienced with bankruptcy to help you. This is the best way to get the financial help you need. Bankruptcy lawyers know the processes and can help you understand your legal rights.
It is possible to fight a wage garnishment without filing for bankruptcy, but the process is a little trickier. Here are some things you can try:
- See if you qualify for an exemption. Some people may be able to get an exemption that reduces the amount of their wage garnishment or eliminates it altogether. Hardship exemptions and head-of-household exemptions are two examples of exemptions.
- Settle the debt. You can try to settle the debt with the creditor. You might be able to negotiate a lump-sum settlement and pay off the debt for less than you owe.
- Go to court. It may be possible to convince the court to overturn the wage garnishment order. However, this is typically not something you can do on your own. It’s best to have your attorney prove that something went wrong with the initial case.
Contact Us Today
Wage garnishment should be avoided if at all possible. If not, contact Adam Freiman to understand your legal options.
The Law Offices of Adam M. Freiman can help you stop wage garnishments and other financial issues. We’ll give you the advice you need to move forward. To schedule a consultation, fill out the online form or call (410) 486-3500.
