Many people know that filing for bankruptcy initiates the automatic stay, which is usually able to stop wage garnishment in its tracks. This allows filers some financial breathing room during the bankruptcy process.
A less well-known feature of bankruptcy is its ability to help recover some of a person's wages that have already been lost to garnishment, provided that those wages were taken within 90 days of the bankruptcy filing.
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Since creditors cannot garnish a person's wages without obtaining a court order, wage garnishment can be stopped by reversing that order.
This is where bankruptcy comes into play. By filing a bankruptcy petition, a person in debt immediately obtains a new order stopping the garnishment (and other collection efforts) while the bankruptcy is settled.
Moreover, people may get some of their garnished wages back in bankruptcy. Here’s how this works:
Wages garnished over a period of several months can add up to a substantial amount of cash, giving filers some financial leeway while they try to discharge their debts through bankruptcy.
Bankruptcy is one of an aggressive creditor’s biggest enemies, particularly when it comes to wage garnishment. In addition to stopping garnishment, though, the automatic stay may also:
So, it is conceivable that filing bankruptcy could make an evening dinner more pleasant, with more food due to recovered wages, and less hassle from creditors who always seem to call during the main course.
Remember, though, that filing bankruptcy is a serious decision and should not be taken lightly. Many filers prefer to do some research and speak with a bankruptcy lawyer before making a decision.
For more information on whether you might be able to recover garnished wages through bankruptcy, contact a nearby bankruptcy attorney today.