How long does it take to stop a garnishment after filing bankruptcy?

Introduction

When facing financial difficulties, individuals may consider filing for bankruptcy as a means of obtaining relief from overwhelming debts. One common concern for those considering bankruptcy is how long it takes to stop a garnishment. Garnishment occurs when a creditor legally seizes a portion of a person’s wages or bank account to satisfy a debt. In this article, we will explore the process of stopping a garnishment after filing for bankruptcy.

Understanding Garnishment and Bankruptcy

What is garnishment? Garnishment is a legal process that allows a creditor to collect unpaid debts by seizing a portion of a debtor’s wages or bank account. This can cause significant financial strain for individuals, making it difficult to meet their basic needs.

How does bankruptcy affect garnishment? Filing for bankruptcy triggers an automatic stay, which halts most collection actions, including garnishments. The automatic stay goes into effect immediately upon filing for bankruptcy, providing immediate relief to debtors.

The Automatic Stay and Garnishment

How does the automatic stay work? The automatic stay is a powerful tool provided by bankruptcy law that puts an immediate stop to most collection activities, including garnishments. Once the automatic stay is in place, creditors are prohibited from continuing or initiating any collection actions against the debtor.

Exceptions to the automatic stay: While the automatic stay provides broad protection, there are certain exceptions to its coverage. For example, it may not apply to certain types of debts, such as child support or alimony. Additionally, if a creditor successfully obtains a court order to lift the automatic stay, they may be able to resume garnishment.

Chapter 7 Bankruptcy and Garnishment

How does Chapter 7 bankruptcy affect garnishment? Chapter 7 bankruptcy is a common form of bankruptcy that allows individuals to discharge their debts and obtain a fresh start. When a debtor files for Chapter 7 bankruptcy, the automatic stay immediately stops garnishments. However, it is important to note that Chapter 7 bankruptcy does not permanently eliminate all types of debts, such as child support or student loans.

Discharge of debts: In a Chapter 7 bankruptcy, most unsecured debts are discharged, meaning the debtor is no longer legally obligated to repay them. This includes many types of consumer debts, such as credit card debt or medical bills. Once these debts are discharged, garnishment for those specific debts should cease.

Chapter 13 Bankruptcy and Garnishment

How does Chapter 13 bankruptcy affect garnishment? Chapter 13 bankruptcy is a reorganization bankruptcy that allows individuals to create a repayment plan to pay off their debts over a period of three to five years. When a debtor files for Chapter 13 bankruptcy, the automatic stay stops garnishments and provides an opportunity to catch up on missed payments.

Repayment plan: In Chapter 13 bankruptcy, a debtor proposes a repayment plan to the court, outlining how they will repay their debts over the designated period. The repayment plan takes into account the debtor’s income and expenses, allowing them to make affordable monthly payments. As long as the debtor adheres to the repayment plan, the automatic stay remains in effect, protecting them from garnishments.

Conclusion

Filing for bankruptcy triggers an automatic stay, which immediately stops most collection actions, including garnishments. Whether through Chapter 7 or Chapter 13 bankruptcy, individuals can find relief from garnishments and work towards resolving their financial difficulties. It is important to consult with a bankruptcy attorney to understand the specific implications of bankruptcy on garnishment and to navigate the bankruptcy process successfully.

References

1. Nolo: www.nolo.com/legal-encyclopedia/bankruptcy-automatic-stay-29933.html
2. United States Courts: www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/process-bankruptcy-basics
3. Investopedia: www.investopedia.com/terms/g/garnishment.asp