In most cases, bankruptcy stops wage garnishment if the person files before the garnishment begins. Once a consumer files bankruptcy, creditors aren’t allowed to pursue them any further. Even the threat of bankruptcy is sometimes enough to stop a creditor. Suing for payment is often considered a wasted effort if a legal procedure is in the immediate future.
Legally, the creditor can still sue for payment until the individual officially makes arrangements. Most creditors wouldn’t pursue the case after that. But for some, they would proceed to get a wage garnishment. The only way to block the garnishment is to go ahead and file bankruptcy. Once the paperwork is official, the creditor must cease all collection attempts.
How Declaring Bankruptcy Changes Your Case
There are different types of bankruptcy. Chapter 13 and Chapter 7 impose an automatic stay on creditors. An automatic stay means creditors must stop all collection attempts. There are exceptions, such as criminal fines, child support, alimony, and student loans. But for all other debts, filing for bankruptcy stops collection attempts. The automatic stay also means lawsuits associated with debt cannot continue. If a creditor was suing a person for payment, that lawsuit must cease.
A creditor can’t garnish a paycheck before winning a lawsuit against the debtor. Once the creditor wins the trial, they must then get an official court order for the garnishment. Filing bankruptcy stops the lawsuit so there can be no judgment. Without a court judgment, the creditor has no recourse for garnishing wages.
Legal Procedure to Stop Garnishment
Upcoming wage garnishments are usually permanently blocked by filing bankruptcy. If the court decides to discharge the debt in question, then that debt is legally erased. That means no creditor can try to collect the debt by any means including garnishment.
Keep in mind that bankruptcy doesn’t always permanently stop wage garnishment. For example, there’s no automatic stay if a person files bankruptcy three times in one year. The third bankruptcy filing won’t have an automatic stay period. Wage garnishment continues until the courts erase the debt.
Bankruptcy in Louisiana
If you are planning to file bankruptcy in Louisiana, hiring an experienced lawyer is essential. E. Orum Young Law Offices has resolved over 20,000 bankruptcy cases — the most in Northeastern Louisiana. Contact us today at (318) 450-3192 for a free case evaluation and ask about our Trial Guarantee.