Wage garnishment creates financial stress and makes it difficult to meet daily living expenses. Filing for Chapter 13 bankruptcy stops wage garnishment and helps debtors regain control of their finances.
How does Chapter 13 stop wage garnishment?
Filing for Chapter 13 bankruptcy triggers an automatic stay on collection activities, including wage garnishment. Creditors stop garnishing wages once the debtor files the bankruptcy petition. The automatic stay provides immediate relief by halting ongoing garnishments and preventing future ones.
Repayment through Chapter 13 plan
Chapter 13 bankruptcy restructures debt into a manageable repayment plan. The debtor makes monthly payments to a trustee, who pays creditors according to the plan’s terms. Unlike wage garnishment, which removes money directly from a paycheck, the repayment plan stays affordable and considers the debtor’s living expenses.
What debts can still be garnished?
Chapter 13 does not stop all wage garnishments. Certain debts, such as child support or alimony, remain unaffected by the automatic stay and continue to be garnished. However, most unsecured debts, like credit card debt and medical bills, fall under the repayment plan, providing significant relief.
Benefits of Chapter 13 over other options
Chapter 13 offers advantages over other options, such as debt consolidation or negotiating directly with creditors. Unlike these options, Chapter 13 provides legal protection from wage garnishment and gives the debtor time to catch up on missed payments without losing income. By creating a structured plan, Chapter 13 prevents creditors from taking aggressive action and provides a clear path toward financial stability.
If wage garnishment causes financial hardship, Chapter 13 bankruptcy provides a solution. Consult with a bankruptcy attorney to learn how Chapter 13 can protect income and create a manageable plan for debt repayment.