How Bankruptcy Affects Wage Garnishment
By law, a creditor who obtains a judgment against you can garnish up to 25 percent of your income after taxes and Social Security deductions have been taken out. For people struggling to pay the bills, wage garnishment is something they literally cannot afford.
Filing for bankruptcy under Chapter 7 or 13 can stop many types of wage garnishments immediately. At Redman Ludwig, P.C., wage garnishment is a very real problem for many of our clients. Over the last 30 years, our lawyers have helped the majority of these people find solutions to their wage garnishment problems.
Central Indiana Wage Garnishment Solutions Attorneys
When you file for bankruptcy, you receive an automatic stay from all collection activities during the bankruptcy process. Creditors will no longer be allowed to garnish your wages for debts such as credit card debt, medical bills, loans and mortgages while your bankruptcy is in progress.
While most wage garnishments can be stopped through Chapter 7 or Chapter 13 bankruptcy, some cannot. Child support, spousal support or restitution for criminal matters are not dischargeable and these garnishments will not be eliminated by bankruptcy.
Tax debt is also treated differently. Unlike other creditors, the IRS is not limited by state exemptions and will often take a huge portion of income, and can take personal property as well. If you currently have an IRS payroll garnishment, talk to a personal bankruptcy lawyer as soon as possible. In our experience, the IRS is often willing to stop wage garnishment and set up reasonable payment plans without the need for bankruptcy. In some cases, we may be able to convince the IRS to modify the tax debt itself so you can afford to make payments and avoid bankruptcy.
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For a free telephone consultation, please call us in Indianapolis at 317-489-5832 or toll free at 866-793-5226, or contact us online.
We are a debt relief agency. We help people file for bankruptcy relief under the Bankruptcy Code.
