Can Bankruptcy Help to Stop Wage Garnishment?
Having your wages garnished in a fragile financial climate can be very stressful, and can lead you into further debt. In order to stop a creditor from garnishing your wages, you may consider filing for bankruptcy. After you file for bankruptcy, whether it is Chapter 7 or Chapter 13, an automatic stay prohibits creditors from continuing to garnish your wages, so long as the bankruptcy is open.
There are some exceptions that may allow some creditors to pursue collection activities, however, more often than not, bankruptcy will stop the harassing effect of wage garnishment. If a creditor wishes to continue garnishing your wages while your bankruptcy is active, that creditor must seek approval from the court to lift the automatic stay, however, the creditor must have a very good and valid reason for seeking such relief from the court.
What Exceptions Allow Wage Garnishment to Continue?
If your wages are being garnished in order to satisfy a domestic support obligation (such as child support and/or spousal support), these debt obligations are not subject to the automatic stay provision that goes into effect after you file for bankruptcy. These debts are considered to be “priority debts” and must be satisfied despite your bankruptcy status.
Wage Garnishment after Bankruptcy
Aside from the priority debt exception described above, no creditor can, without approval of the court, seek wage garnishment activities as long as your bankruptcy is active. Once your bankruptcy has been discharged, a creditor is not allowed to resume wage garnishments. However, if your case is dismissed without a discharge of your debt, a creditor is allowed to continue garnishing your wages. If your wages are being garnished and you are concerned about what may happen after the conclusion of your bankruptcy, you should consult with a Philadelphia bankruptcy attorney who can answer all of your questions and address all of your concerns.
When Can Wage Garnishment Be a Good Thing?
In rare situations, if you have only one creditor garnishing your wages, and you are able to pay for your daily living expenses and are not incurring new debt, wage garnishment may be the best way to satisfy the debt and move on. This ensures that payments are made on a regular basis and removes your responsibility for making monthly payments. This is not a likely scenario, however, it does happen, and if you are able to avoid bankruptcy and satisfy your minimal debt with wage garnishment, then you may be able to rebuild your credit after the wage garnishments have satisfied your debt.
While wage garnishment can be positive in certain situations, it can also have a negative impact on your current credit report and credit score. You may find it difficult to qualify for a credit card or a loan. Because wage garnishment can have unpredictable consequences, you should speak with a bankruptcy attorney who can provide you with multiple debt-management options that will help to stop and prevent wage garnishment in the future.
Contact The Law Offices of Georgette Miller and Associates, P.C. Today
Seeing your hard earned money go to a creditor directly from your paycheck can be devastating. Bankruptcy is a useful debt-management option that can help to put an end to wage garnishments. At The Law Offices of Georgette Miller and Associates, P.C., our bankruptcy and debt-management attorneys provide outstanding service to individuals like you who need help managing and getting rid of debt. The Law Offices of Georgette Miller and Associates, P.C. offers debt-management and bankruptcy services to clients located in and around Philadelphia, PA, New York, New Jersey, Washington, D.C., and Wilmington, DE. To schedule an appointment with one of our seasoned bankruptcy attorneys, contact our office today by calling (866) 96-GMLAW.