Stop Wage Garnishments in Los Angeles
Get Help from the Wage Garnishment Attorney at Syndicate Legal
At Syndicate Legal, we are passionate about helping our clients overcome their financial burdens. If you received your paycheck, only to find a giant chunk of your pay missing because of a creditor, then you are experiencing what is known as a wage garnishment.
In a nutshell, if your income is greater than your reasonable and necessary living expenses such that you have sufficient money left over, (this amount depends on how much your owe and the details of your case), then you may be able to qualify for a Chapter 13 bankruptcy.
What Is Wage Garnishment?
Wage garnishment happens when a court issues an order requiring your employer to withhold a portion of your paycheck and to send it directly to a creditor that you owe. In general, your paycheck continues to be garnished until the debt is paid off in full or otherwise resolved.
A wage garnishment lasts until the debt is completely paid off. While this helps creditors obtain debts from borrowers, a lot of times it wreaks havoc on a borrower’s financial situation. Even though most of your wages are protected from garnishment, it can still have a serious impact on your income. For example, so long as there is only one debt being garnished from your wages, your employer cannot retaliate against you because of wage garnishment. However, if multiple creditors are garnishing your wages, then your employer can renegotiate the terms of your employment. Consequences like these lead to many people being trapped by their debts, creating a cycle of financial instability.
Can Chapter 7 or 13 Bankruptcy Stop Wage Garnishment?
Yes! Once a bankruptcy case has been filed, the automatic stay will prohibit the continuation of any garnishment not for a domestic support obligation.
What Is An Automatic Stay?
If you’re struggling to repay a substantial amount of debt, then you’ve likely considered bankruptcy. While it can be an intimidating topic, the truth is that bankruptcy exists to help struggling individuals get back on their feet. Chapter 7 bankruptcy has different aspects built in that ease the burden of debt and give you a second chance at financial freedom. The first way that bankruptcy offers relief is through the automatic stay.
The automatic stay means that for the duration of your bankruptcy filing, none of your creditors are allowed to pursue their debts. This includes creditors, collection agencies, and government entities. No more phone calls, letters, or emails and definitely no more wage garnishment (except for domestic support obligations). They can’t take any actions against you due to your debt. As soon as you submit your bankruptcy petition, the court will send a notice to each of your creditors and inform them that you filed, and about the limits imposed on them by the stay.
Relief from Creditors and Debts
Almost all forms of wage garnishment are halted by an automatic stay. Even if you have multiple creditors enforcing wage garnishment on your paychecks, they can usually be stopped by filing for Chapter 7 bankruptcy and then erased if you receive a discharge. Filing for bankruptcy will not only temporarily solve your wage garnishment problems, but potentially eradicate them altogether.
Exceptions to the Automatic Stay
It’s important to note, however, that not all forms of wage garnishment can be halted through an automatic stay. Sometimes this depends on the type of debt, other times it depends on how many times you’ve filed bankruptcy in the recent past.
Domestic Support Obligations
These garnishments are protected by law, and therefore cannot be removed for any reason other than a change in your domestic circumstances. So if this kind of wage garnishment is the only reason you have for seeking bankruptcy, you should look at other solutions first.
Multiple Bankruptcy Filings
If you filed for bankruptcy within the past year and had your case dismissed, then your automatic stay will only be in effect for 30 days. You can ask the court to extend this timeframe, so long as you can prove that the first filing was in good faith (meaning that you truly believed you would be approved for bankruptcy, and were not simply filing to hold off creditors).
Along the same lines, if you filed for bankruptcy twice within the past year and go to file for the third time, you will not be granted an automatic stay. The reason these rules exist is to prevent individuals from abusing the automatic stay. Without these rules, debtors could file for bankruptcy an indefinite amount of times to avoid repaying their debts. You can still ask the court to instate an automatic stay on your third filing, once again by proving that the previous two filings were made in good faith.
What About After Your Bankruptcy Is Over?
While an automatic stay provides great relief from the pressure of wage garnishment, it’s not a permanent hold against your creditors. Once your bankruptcy filing is complete, you lose the protection of the automatic stay. However, your discharge will protect you from creditor actions for most, if not all of your debts. If your wages were getting garnished for a credit card bill, deficiency balance after a repossession, or medical debt and not for a non-dischargeable debt, the garnishment cannot start up again after your case is closed.
If you’re encountering financial distress as a result of wage garnishments, filing for Chapter 7 bankruptcy might be the best way to resolve the issue. Not only will it halt your garnishments for a short period of time, but it has the likely potential to eliminate those debts altogether.
Take the First Step: Call us today for your free consultation to see if you qualify for Chapter 7 or 13. There is no charge for the call and we’re happy to provide options.
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