Can Bankruptcy Be Used to Stop Wage Garnishment?

hands passing money

If you are struggling to pay off your debt, you may get a court order against you in which your employer will be required to withhold your payments. With having to go through this wage garnishment, you may be wondering if there is a better solution for making your debt payments. Follow along to find out whether bankruptcy can be used to stop wage garnishment and how a proficient Rockland County Chapter 7 bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq. can work on your behalf.

What is wage garnishment?

To reiterate, wage garnishment entails court-ordered deductions from the pay you receive from your employer. This is a common method for satisfying certain debts or legal obligations. Examples that may apply to you are as follows:

  • If you have an outstanding balance on your court-ordered child support.
  • If you have an outstanding balance on your medical bills.
  • If you have an outstanding balance on your court fees.
  • If you have unpaid taxes.
  • If you have unpaid credit card debt.
  • If you have defaulted on your student loans.

What is an automatic stay?

First of all, once you file for a Chapter 7 bankruptcy, the New York bankruptcy court will impose an injunction on all of your creditors. This injunction is known as an automatic stay. Essentially, this will prohibit all creditors and collection agencies from performing any collection activities during your bankruptcy proceedings, including the following:

  • Filing lawsuits against you.
  • Placing restraints on your bank accounts.
  • Sending collection letters to you.
  • Making incessant collection calls.
  • Foreclosing your home.
  • Repossessing your assets.

Most importantly, an automatic stay will prevent all creditors and collection agencies from setting wage garnishments.

Is it beneficial for an automatic stay to be used to stop wage garnishment?

Not only does an automatic stay will put an immediate stop to lenders’ collection activities, like wage garnishment, but it also comes with many more benefits.

For one, it will give you the time you need to regroup and reassess how to go about paying off your debts. Without the pressure that comes with being harassed by lenders, you will have a clear mind when developing a strategy on how to financially recover from your debts. Only with a bankruptcy filing will you be able to schedule your debt payments in a way that best fits your current financial situation.

However, this is not to say that a bankruptcy filing is a right move for everyone. If you are struggling with determining whether you should file for a Chapter 7 bankruptcy, a Chapter 13 bankruptcy, or any bankruptcy at all, then you must consult with a talented Rockland County bankruptcy attorney. We look forward to speaking with you.