Does The Automatic Stay Apply To All Creditors And All Types Of Debt?
The automatic stay applies to all creditors and debts. All automated payments, voluntary payment plans and the like should cease. Payments to the IRS and student loans should also cease upon filing.
How Fast Can A Garnishment Be Stopped Once You File For Bankruptcy?
Garnishment should stop as soon as you give them the notice of filing along with the docket number. This should be sufficient to end it. Much like I do when I file a bankruptcy to stop a real estate foreclosure, I will fax notice to both the creditor’s attorney and the employer of the bankruptcy. This notice tells them of the filing, gives them the docket number and informs them of the automatic stay and the wage garnishment is at an end.
How Long Does The Automatic Stay Stop The Wage Garnishments?
Any act against the debtor or debtor’s property is stayed. What is required is for the creditor to file a motion with the Bankruptcy Court seeking relief from the stay to be allowed to go forward with their wage garnishment. This request must be approved by the Bankruptcy Court. Now, wage garnishment is not something the Bankruptcy Court will allow because it would result in the payment of an unsecured debt that would be discharged in the debtor’s bankruptcy. The more likely relief from the automatic stay action would be a mortgage holder seeking to continue with its foreclosure sale or a lienholder on a car seeking its repossession. Given that bankruptcy does not relief an insurance company from providing coverage, some litigation involving insurance coverage may seek relief from the automatic stay.
Can I Ever Recover Garnished Wages? Is It Worth The Cost And Effort?
If they’ve taken your money with a court order and garnished it, there is nothing to do to recover lost wages unless they have taken more than they are entitled to, and they usually are meticulous about what they do or don’t take. After all, there is a court order authorizing the wage garnishment. Very often, people don’t think the creditor is going to be serious. They get a call from other people, human resources that are garnishing your wages for something, a creditor’s claim, unpaid child support or unpaid taxes. There is not much to argue about.
After Garnishment Can Debtor Resume Payments On A Debt That Wasn’t Completely Covered In A Bankruptcy?
If the debt has been discharged, the creditor’s claim has been discharged and there is no basis for a wage garnishment. So unless it is like a student loan that is not dischargeable, unpaid child support or non-dischargeable taxes, you should be all set. There are consequences for creditors who violate the debtor’s discharge.
Additional Information On Wage Garnishments In Massachusetts
As I said, if they reach the point of a wage garnishment, they’ve been attempting to ignore their financial problems by playing ostrich . . . putting their head in the sand. A wage garnishment is not something that occurs in a vacuum. To me, it indicates that the debtor has some some serious problems with their creditors, problems that they should be dealing with. Typically, nothing happens quickly, and when people find themselves in a bad situation, it’s because they’ve ignored it for far too long. They shouldn’t have allowed it to happen. That’s the best way to stop them because once you allow the wage garnishment, you have to hope now that the creditor may be allowing you to take active steps to end it.
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