If you are behind in your debt and your creditors are threatening you with liens or wage garnishments, filing bankruptcy can stop that action from proceeding. The automatic stay begins when you file bankruptcy and prevents your creditors from any collection attempts against you. The automatic stay gives you time to figure out how you will proceed with your financial situation.
25% of your Disposable Income
If your creditor already took you to court over nonpayment, they may have won the legal right to garnish your wages. The court will allow 25% of your disposable income to be taken from your paycheck. If this creates a financial hardship for you filing bankruptcy may be the answer.
If money is being taken out of your check for unsecured debt such as credit cards or personal loans, bankruptcy can eliminate the original debt, which will eliminate the wage garnishment. Bankruptcy can stop Social Security and other public benefits from collecting overpayments as long as it was not fraudulently obtained.
Won’t Stop Alimony or Child Support
Bankruptcy can eliminate certain types of wage garnishment. If you are having money taken out for child support or alimony, bankruptcy will not make those stop. You will need to continue to make those monthly obligations or face a penalty, including and up to jail time.
If you are about to be taken to court and worry that part of your paycheck will be sent to your creditors, or you already have a wage garnishment, contact a Dallas bankruptcy attorney to find out what you can do to get your financial situation more stable.