If you fall behind in making your payments, a creditor can obtain permission to seize part of your paycheck by winning a judgment against you. The creditor could legally take up to 25% of your earnings. This could make it impossible for you to cover your rent, mortgage or other bills creating an even more significant hardship.
Your employer will be required by law to withhold a part of your paycheck and forward it to the creditor that won the judgment. This garnishment can last as long as the debt is owed.
Filing bankruptcy will immediately stop wage garnishments either temporarily or permanently. Bankruptcy’s automatic stay stops all legal actions regarding your finances including wage garnishments as soon as the court clerk stamps your filing. If you have money coming out of your paycheck, bankruptcy will put a hold on that until you work out a plan.
Once your bankruptcy is settled, the debt will be discharged, and you will no longer owe the money from the original garnishment.
Some debt cannot be discharged. Child support or alimony garnishments will not be eliminated or stopped and can continue during the bankruptcy process. Depending on how old your tax debt is, newer tax liabilities cannot be discharged in any bankruptcy filing, but if your tax debt is over three years old, there is a good chance it can be removed.
If you are struggling to pay your debt and your paycheck is not covering all your bills. If you have a wage garnishment or the threat of legal action that could result in losing some of your paycheck, contact a Columbus bankruptcy attorney to stop the garnishment and other legal action regarding your finances.