Does Chapter 13 Bankruptcy Stop Garnishment? An In-Depth Analysis
If you’re struggling with debt, you may be facing wage garnishment, which is a court order that requires your employer to withhold a portion of your wages and send it directly to your creditor. This can be a difficult situation to manage, but filing for Chapter 13 bankruptcy may be able to help. In this article, we will explore whether Chapter 13 bankruptcy can stop wage garnishment.
What is Chapter 13 Bankruptcy?
Chapter 13 bankruptcy is a legal process that allows individuals to restructure their debts and repay them over a period of three to five years. It’s also known as a wage earner’s plan because it’s designed for individuals with a steady income who are struggling to keep up with their debt payments. When you file for Chapter 13 bankruptcy, you will work with a bankruptcy trustee to develop a repayment plan that is tailored to your specific financial situation.
Does Chapter 13 Bankruptcy Stop Garnishment?
Yes! Filing for Chapter 13 bankruptcy will absolutely stop a wage garnishment or any other garnishment action. When you file for Chapter 13 bankruptcy, the automatic stay goes into effect, which prohibits creditors from taking any collection actions against you, including wage garnishment. This means that your employer will no longer be required to withhold a portion of your wages and send it directly to your creditor.
How Does Chapter 13 Bankruptcy Help with Garnishment?
Filing for Chapter 13 bankruptcy can help with wage garnishment in several ways. First and foremost, it will stop the garnishment from continuing while the bankruptcy case is ongoing. This will give you some breathing room to get back on track with your debt payments and develop a repayment plan that works for you.
Additionally, Chapter 13 bankruptcy can help you catch up on missed payments on secured debts. Even more importantly, can provide a discharge for unsecured debts upon completion of the payment plan which provides permanent relief from a garnishment.
If you’re facing wage garnishment, filing for Chapter 13 bankruptcy can be a viable option for stopping the garnishment and getting back on track with your debt payments. The automatic stay that goes into effect when you file for Chapter 13 bankruptcy will stop the garnishment, giving you some breathing room to develop a repayment plan that works for you. However, it’s important to note that there are some exceptions to the automatic stay, and you should speak with a qualified bankruptcy attorney to determine the best course of action for your individual situation.