Tips to Avoid Wage Garnishment Through Filing Bankruptcy in Franklin County, Ohio
When you're struggling to make ends meet, it can be financially devastating to have a creditor suddenly snatch 25 percent or more of your wages, benefits check, or bank account to pay an overdue debt. Luckily, filing bankruptcy in Franklin County, OH can quickly put an end to income garnishment and even help you get your money back.
The Automatic Stay Stops Creditor Actions
Bankruptcy's most powerful weapon against aggressive creditors is the automatic stay. This protection falls in place the moment your petition is accepted by the bankruptcy court, and makes creditors end all collection actions including wage garnishments.
Regardless of whether the garnishment was just initiated or going on for years, the creditor must immediately stop taking your money upon notification of your bankruptcy. Additionally, the automatic stay remains active throughout your case, so creditors cannot resume debt collection until your case concludes, which can take anywhere from a few months (chapter 7) to several years (chapter 13).
A Few Exceptions to the Automatic Stay
While the automatic stay stops most creditor garnishments, there are exceptions. For instance, wage garnishments associated with domestic support obligations such as child support and alimony will continue.
To learn about the exceptions that could impact your case, book a consultation with a bankruptcy attorney. They will let you know what the automatic stay covers and help you work out a plan to deal with the debts that may be exempt from it.
Getting Your Money Back from Creditors
In addition to stopping the wage garnishment, filing bankruptcy can force creditors to return some of the money they collected. Specifically, any creditor who took more than $600 in the 90 days prior to your filing can be forced give it back after receiving notice you filed a petition with the court as long as the money is covered by a bankruptcy exemption.
The bankruptcy trustee will typically notify affected creditors to return the funds, but this may take a while. If you need the money sooner or the creditor isn't responding to the trustee, an attorney can initiate an adversarial proceeding that will make the creditor refund the money.
Debt Obligations After Bankruptcy Discharge
Bankruptcy usually eliminates your obligation to repay the debts that led to the wage garnishment, meaning you won't be required to pay anything to the creditors after receiving your discharge papers. The creditor won't be able to garnish your income again for the same debt, freeing you to make a financial fresh start.
If you are dealing with a tough financial situation caused by wage garnishment, Wood & Brewer can help you file bankruptcy in Franklin County, Ohio, to protect your paycheck and bank accounts from aggressive creditors. We welcome you to contact us today for a free consultation.