When you are already struggling to pay your bills, having your paycheck garnished is a killer. Instantly you might not have enough money to pay your utilities, car payment, mortgage or even buy groceries or medicine. Filing for bankruptcy will stop the garnishment in its tracks.
The way it works is that the instant a bankruptcy petition is filed the automatic stay goes into effect. The automatic stay prohibits a creditor from taking any further collection activity without the permission of the bankruptcy judge. If the garnishment has not begun before your bankruptcy case is filed, then the bankruptcy will prevent the garnishment from beginning at all. If the garnishment starts before your bankruptcy case is filed, then the garnishment will stop immediately after your case is filed. The only wage garnishments the automatic stay won’t stop are those for child-support or other court-ordered domestic support obligations.
There is good news! If a creditor has taken over $600 from your paycheck or your bank account within the 90 days before you file bankruptcy, it’s legally a “preferential transfer” and we can get the garnished funds back from the creditor.
If your wages are being garnished or about to be garnished and you would like to know more about how bankruptcy would be able to help you, please contact us to schedule a FREE consultation. We’re here to help, let us!
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Chapter 7, Chapter 11 and Chapter 13 Bankruptcy Attorney with locations in Royal Oak, MI and Sterling Heights, MI