Bankruptcy’s automatic stay can stop wage garnishment
Having your wages or bank account garnished by creditors can be frightening, especially since you probably are already dealing with huge debt problems by that point. With less money coming in, how are you supposed to get a handle on your bills?
Bankruptcy may be an option. Going through Chapter 7 or Chapter 13 bankruptcy has several advantages. One of them is that collection efforts like garnishment stop immediately.
The moment you file for bankruptcy, something called the automatic stay takes effect. This stay stops any pending lawsuits from creditors or many other parties seeking money from you, and prevents any other suits from being filed. For those in serious financial peril, this could make a big difference.
Among the things that an automatic stay protects people from include:
- Foreclosure proceedings
- Having their utilities shut off
- Wage garnishment
Exceptions exist, and there are some things that other parties can still pursue you for. Suits related to child support and some tax proceedings can continue. In addition, an automatic stay cannot keep you from having to fulfill the portion of a criminal sentence unrelated to debt or repay a loan against your pension.
In many cases creditors will try to get around the stay by asking the bankruptcy court to “life the injunction,” a term meaning they want the judge to remove the stay. The judge generally will do so if the creditor can show the automatic stay is not serving its intended purpose.
Still, an automatic stay can give you some breathing room while going through bankruptcy.