Bankruptcy is designed to let you get your head above water financially while a portion of your debts still get paid off. As anyone struggling monetarily can tell you, it’s hard to return to financial stability when your already limited funds take a hit through monthly garnishments. The good news is that some of the pressure is relieved when you file for bankruptcy, as many wage garnishments can be ended quickly.
When Wages May Be Garnished in New York
If you owe a lender money, they have the legal right to sue you for back payments. A judge may even order that a portion of your paycheck is routed directly to the bank, company, or private person who is still owed payments. Known legally as an income execution, wage garnishment is often ordered for:
- Debt from medical care
- Legal issues stemming from divorce, such as child support
- Past due credit card payments
- Student debt
- Unpaid vehicle loans
Having a significant chunk of your paycheck taken before it reaches your bank account is often financially devastating, especially when dealing with issues like medical treatment costs or other unexpected setbacks that can make it difficult to earn a living.
How Bankruptcy Can Potentially Stop Wage Garnishments
When wage garnishments prevent you from staying ahead of other bills, bankruptcy may be your only option. In many cases, filing for bankruptcy starts what’s known as an automatic stay on most types of income execution.
Essentially, initiating a bankruptcy can end wage garnishments immediately. In fact, any creditor that continues to pull wages after the stay goes into effect can be fined and forced to give the money back to you. That’s one of the reasons it’s important to call an attorney early and find out what kind of bankruptcy you can file for, as well as how to start the process.
There are critical exceptions to ending specific wage garnishments, however. Chapter 7 bankruptcy doesn’t typically stop income execution over child support, for instance. It also may not wipe out your college loans unless you meet specific criteria.
Get Help From an Experienced Bankruptcy Lawyer
Don’t wait for your situation to deteriorate any further. Set up an appointment with our experienced bankruptcy attorney to find out if you can stop wage garnishments and get back on your feet.