When you're already struggling financially, losing money each month to wage garnishment can make problems worse. In most cases, filing for bankruptcy can help because bankruptcy's "automatic stay" stops most wage garnishments immediately. Find out how to:
If you'd like to learn what happens to debt and property in bankruptcy, try our quick ten-question bankruptcy quiz, and read our list of things you should know about bankruptcy.
Shortly after filing, the bankruptcy court tells your creditors to stop collecting against you. Your creditors will receive a letter informing them of your bankruptcy case and other important dates, like the 341 meeting of creditors, the one appearance all filers must attend. The letter also includes the automatic stay order directing creditors to stop collection actions.
Because the letter can take a week or so to reach creditors, you or your bankruptcy lawyer will want to notify your employer of the automatic stay. A quick email or fax with the filing date and case number will work to stop your wage garnishment.
However, the automatic stay doesn't work on all wage garnishments. For instance, support obligations will remain in place. Also, if you've filed for bankruptcy before, the automatic stay might not remain in effect long. Learn about exceptions to the automatic stay.
You'll probably be able to erase the underlying garnishment debt and any credit card balances, medical and utility bills, court judgments, and other obligations typically erased in bankruptcy.
But you might not be completely debt-free. You'll still owe "nondischargeable debts" after a Chapter 7 case. In Chapter 13, most nondischargeable debts are calculated into the Chapter 13 plan. Support obligations, recent taxes, and debts related to driving under the influence are examples of nondischargeable debt.
Bankruptcy is an unusual area of law because it's essentially a qualification process. The laws provide instructions for completing a 50- to 60-page bankruptcy petition, and because all rules apply in every case, you can't skip a step.
The forms and resources below will help you find more information. Also, you can use this list of Chapter 7 and 13 bankruptcy forms to see where this topic falls. And this handy bankruptcy document checklist will help you gather the things you'll need to complete the petition.
More Bankruptcy Information |
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Bankruptcy Forms |
The bankruptcy court tells creditors about the automatic stay, creditors' meeting, and important dates using these forms: |
Related Information |
Should I Ignore a Debt Collector's Calls and Letters? How Much Debt Do You Need to File for Bankruptcy? Will I Lose All My Property If I File for Bankruptcy? |
We want to help you find the answers you need. Go to TheBankruptcySite for more easy-to-understand bankruptcy articles, or consider buying a self-help book like The New Bankruptcy by Attorney Cara O'Neill.
We wholeheartedly encourage research and learning, but online articles can't address all bankruptcy issues or the facts of your case. The best way to protect your assets in bankruptcy is by consulting with a local bankruptcy lawyer.