You have most likely heard the term “garnishment.” This is when a creditor takes back the debt it is owed, typically by claiming a portion of a debtor’s wages. The technical term of garnishment is ” income execution.”
Creditor Must Prove Debt with Judgment
For a creditor to begin an income execution, it must be shown that a debtor owes money to that creditor. This “proof” is obtained through the legal action of the creditor suing the debtor for a judgment against the debtor. Without this judgment, a creditor does not have legal proof that a debtor owes money.
Limits On Income Execution
Each state has its own rules regarding income executions and how much can be “garnished” from a debtor. You’ll want to contact a bankruptcy attorney like a phoenix chapter 7 bankruptcy lawyer to learn what your state’s rules are governing garnishment.
Can Bankruptcy Stop A Garnishment?
The simple answer to this question is sometimes. When a debtor files for bankruptcy, an automatic stay is enacted. This meas that filing a bankruptcy case – Chapter 7 or Chapter 13 – will stop the garnishment instantly. This means that a creditor cannot take any portion of your wages to pay back debts.
But if the automatic stay is limited because of filing issues, then the income execution might not stop or might only stop for a short amount of time. You’ll want to discuss the limits of the automatic stay with a bankruptcy lawyer.
Some legal actions are not covered by an automatic stay. It often depends on the form of bankruptcy a debtor files. For example, in a Chapter 7 bankruptcy, collection of past due child support may not be stopped. But in Chapter 13 bankruptcy, that garnishment may stop because a debtor will work out how to pay the back-owed child support through a repayment plan.
This is why it is crucial to work with a bankruptcy attorney. You’ll want to understand what form of bankruptcy to file, as well as understand all of the ins and outs regarding garnishment.
Working with a Bankruptcy Attorney
Bankruptcy can be an overwhelming process. That’s why we advise that you work with a phoenix chapter 7 bankruptcy lawyer that is familiar with various debt repayment options. We are committed to helping our clients understand their rights and options under the bankruptcy law and developing the debt relief solution that makes the most sense for each individual. We invite you to call (602) 648-3274 or contact our Arizona office to schedule a free initial consultation.
668 N. 44th St., Ste 320, Phoenix, AZ 85008