Bankruptcy Attorney in Monroe, LA

Are you experiencing trouble repaying your debts? Do your creditors intend to garnish your wages to collect payments? In most judgments, creditors will frequently go after your wage attachment or paycheck. Your employer may withhold a portion of your pay each payday to compensate your creditors. This, however, is not the end. You can still prevent and stop wage garnishment by filing for Bankruptcy Chapter 7. In addition to putting an end to wage garnishment, it can also eliminate your debt problems. 

The Chapter 7 Bankruptcy automatic stay disallows creditors from pursuing collection activities during your bankruptcy petition. However, it cannot be denied that the nature of bankruptcy laws is naturally confusing and complicated. But this is not a hindrance to filing for Chapter 7 bankruptcy. You just need to contact a credible bankruptcy attorney in Monroe, Louisiana.

Orum Young Law, Bankruptcy Specialist, is an experienced and reputable bankruptcy firm in Monroe, Louisiana. For over 35 years, we have been helping thousands of individuals and families win bankruptcy cases. We carefully examine each client’s financial situation and work with them to establish a path to a brighter financial future. We handle cases with diligence, respect, and confidentiality. To assist you in eliminating your debts, we will work very hard to achieve the best possible result and bring you debt relief.

If you need help on stopping or preventing wage garnishment through filing Chapter 7 bankruptcy, schedule a free consultation with us now

How Does Wage Garnishment Work?

stop wage garnishment with chapter 7 Creditors cannot immediately proceed with garnishing your wages without first obtaining a valid court order from a bankruptcy court. In most cases, they will need to file a lawsuit against you. However, exceptions are made, for instance, for taxes, student loans, and child support.

As soon as the creditor obtains a money judgment, they can have the wage garnishment order. The marshal or sheriff will send the order to your employer, and the latter can take a portion of your wages to pay your creditors.

Limits are also imposed on the amount that the employer is allowed to garnish from your paycheck every month. You could safeguard even more by applying for these exemptions. Understand more by contacting a knowledgeable bankruptcy lawyer.

Automatic Stay and Chapter 7 Bankruptcy 

When you file a Chapter 7 bankruptcy petition, the law requires that the automatic stay be imposed to protect you from creditor harassment or other collection activities. During the case, the automatic stay prevents creditors from pursuing collection actions against you. 

Since wage garnishment is considered a collection activity, it should not continue after you file for Chapter 7 bankruptcy. Some exceptions to the prohibition exist, such as child support. Creditors can request the bankruptcy court to lift the automatic stay. The court will lift it only if:

  • The creditor settled debts with collateral, such as a car or house, and
  • The creditor can be proven to lose a significant amount of money if forced to wait until the end of the case.

How Can Your Employer Stop The Wage Garnishment

When filing for Chapter 7 Bankruptcy, you must submit a list of creditors, including their contact information and address location. The bankruptcy court will send a notification to every creditor that you have petitioned for bankruptcy. Creditors will be ordered to stop wage garnishment activities.

If you wish to make things quicker, you or your bankruptcy attorney can transmit a copy of your petition to the creditor. It would be a great way to do this if you filed bankruptcy shortly before the wage garnishment starts.

Little to No Automatic Stay for Repeated Bankruptcy Filings

If you have filed for Chapter 7 bankruptcy before, the automatic stay will immediately end after that short period. If this is the case, the wage garnishment can be retained. The rules are as follows:

  • If you previously filed for Chapter 7 bankruptcy and were rejected within a year of your most recent bankruptcy filing, the automatic stay will only last for 30 days. You can inquire or request the bankruptcy court to have an extension. With the assistance of your bankruptcy attorney, you have to prove that your recent bankruptcy filing was done in accordance with the laws.
  • If you filed a bankruptcy petition twice during the past year, the automatic stay could not be executed on your third filing. You can, however, still ask the bankruptcy court to enforce the stay.

It is a well-established rule that debtors cannot utilize serial bankruptcy filings to stop or prevent wage garnishment indefinitely.

Recover Garnished Wages Prior To Bankruptcy Filing

You can still recover your garnished wages. However, in most cases, doing so will be costly. To avoid undue losses, you should file a Chapter 7 bankruptcy as early as possible. 

Wage garnishment should take place within 90 days from the date you petitioned for bankruptcy. It should not exceed a specific amount, and you should protect the said amount without any exemption. 

Almost every state has no exemption for cash retention, no matter how large or small. Furthermore, in order to recover your funds, you should file a bankruptcy case against your creditor. Whether it makes sense to you or not depends on how much money you hold to recover and how much attorney fees you will incur if you file a counter lawsuit.

What Will Happen To Wage Garnishment When Chapter 7 Bankruptcy Case Ends?

As soon as your Chapter 7 bankruptcy ends, the automatic stay will follow. But, if the debts subject to wage garnishment were discharged by your bankruptcy, your employer is barred from continuing wage garnishment.

If your bankruptcy petition was rejected or dismissed prior to receiving the discharge, or debts were not wiped out by wage garnishment, the creditor can continue the wage garnishment. 

Call our Bankruptcy Attorney in Monroe, Louisiana Now!

Stopping a wage garnishment is a wise move, but preventing it is wiser. Before your creditors pursue any garnishment, you should immediately talk to an experienced bankruptcy attorney. This will help you avoid conflicts and also allow you to save more money and time. If filing Chapter 7 bankruptcy is your choice, you can set up a free legal consultation with Orum Young Law, Bankruptcy Specialist, for us to get you through.

Orum Young, Jr., Devin T. Jones, and Joseph R. Moore are ready to assist you with bankruptcy filings and other financial problems you need to resolve. For over 35 years, thousands of clients dealing with financial hardships have been assisted by our firm in getting debt relief. Our dedicated team will help you through the entire process of bankruptcy. Other than Chapter 7 Bankruptcy, we can also help you with Chapter 13 Bankruptcy. Call us now to get started with your bankruptcy filing in Louisiana.