Bankruptcy Automatic Stay: Stop Wage Garnishment

The automatic stay is extremely helpful when you’re trying to keep the money you work for every day. A wage garnishment is the last part of a legal process where creditors are trying to collect the money you owe. Generally, after the demands for payment—either through constant calls and letters—your creditors file a lawsuit against you. Once in front of a judge, the creditors prove their case of why you owe them the money. Or, when you don’t file an answer with the local court to respond to the creditors’ lawsuit, then they automatically receive a judgment against you.

An Automatic Stay Means That Creditors Can’t Take Money out Your Paychecks

An automatic stay prohibits creditors from starting or continuing to garnish your wages. In addition to stopping wage garnishments, it also stops other debt collection activities. These debt collection activities include filing or continuing lawsuits or foreclosures. Creditors can’t even call you to talk about the money you owe.

Personal Bankruptcy Is the Only Way to Obtain an Automatic Stay

Personal bankruptcy is a legal process which allows you to either eliminate or repay your debts. For instance, chapter 7 is for people without stable income. This means that your unsecured debts like credit card bills are no longer your responsibility to pay. Chapter 13 is for individuals with stable income. Thus, you can repay your unsecured and secured debts over a three to five year period. It’s important to distinguish how automatic stay affects people in chapter 7 and chapter 13. Both chapters protect you against wage garnishments and lawsuits. However, only chapter 13 protects you against foreclosures.

Creditors Take Money Out of Your Paychecks through a Wage Garnishment

 Once creditors obtain a legal document allowing them to garnish your wages, they submit it to your employer. The employer then deducts the money from your paycheck after your local, state and federal taxes are withheld. You receive the rest of the money you made after any other deductions such as health insurance are taken out.

Contact a Lawyer about Obtaining an Automatic Stay

Seek legal guidance concerning an automatic stay. A lawyer will determine which bankruptcy is best for you. Also the bankruptcy lawyer will file all the paperwork necessary to stop creditors from taking money from your paycheck.