There are a number of instances when wages can be garnished by a lender. When a chapter 7 bankruptcy is filed, the court will place an automatic stay on your creditors. It is done to protect your assets, as a first step. In most cases, wage garnishments fall under this category. So if you fear your monthly income will be affected, filing for .
Bankruptcy Resolves Wage Garnishment
Wage garnishment is the practice of deducting what you owe to your lenders from your salary and wages. A portion of it can be taken every month like an enforced EMI. It can, however, only be done after a successful lawsuit has been filed and ordered by the court. Once your lender has a court order, it can be presented to the employer and they will send money from your salary every month.
Under a Chapter 7 bankruptcy, your assets will get the automatic stay and they will be protected. The stay will freeze all the collection activity from affecting you. Garnishment is a collection activity, so it will also be halted. There are, however, a few debts that you cannot get away from. Such nondischargeable debts will remain. If the creditor is able to get an order from the court to get you to pay those debts, then the garnishment will continue. For example, child support, taxes, and student loans will not be covered under the automatic stay. If the stay is active and your lenders ask the court to lift the stay, the court is likely to reject that request.
When bankruptcy ends and your debts have been discharged, the garnishment will also be closed. The creditor cannot continue to take money from your wages. However, if the bankruptcy case is not accepted by the court, the garnishment will continue. Contact your Houston bankruptcy lawyer for more information and to wage garnishment today.