Wage garnishments refer to the withholding of money from a person’s earnings for the purposes of paying a debt. Triggered through court orders, wage garnishments, once in place, will typically persist until a debt is paid off or arrangements are made to pay the debt in full.
When people struggling financially have defaulted (i.e., failed to make payments) on debt, creditors may threaten to take action against these people in the form of wage garnishments. This threat can be financially and emotionally stressful, particularly when people are relying on their wages to support their families or cover basic living costs.
How to Stop Wage Garnishments
The good news for borrowers who find themselves being threatened with wage garnishments is that they can stop creditors from proceeding with these legal actions by filing for Chapter 7 bankruptcy. In fact, when people file for Chapter 7 bankruptcy, a court order known as an automatic stay goes into effect and prevents creditors from:
- Garnishing a person’s wages
- Repossessing the individual’s property
- Initiating foreclosure proceedings
- Contacting the borrower at all in an attempt to collect on debt.
If creditors violate automatic stays, borrowers can sue them and, if successful, win damages (including attorney’s fees) from these creditors.
Exceptions to Chapter 7 Automatic Stays and Wage Garnishments
It’s important to point out that, when it comes to wage garnishments and filing for Chapter 7 bankruptcy:
- Filing for bankruptcy cannot stop garnishments that are already in place – therefore, it’s critical that borrowers take action before these garnishments are approved by the courts.
- Automatic stays will be lifted if a bankruptcy case is rejected by the bankruptcy court or if bankruptcy petitioners fail to file a Statement of Intentions within 30 days of filing for Chapter 7 bankruptcy. If this happens, creditors can proceed with wage garnishments against borrowers.
- Some creditors can still pursue wage garnishments if the debt that has been defaulted on is associated with:
- Child support or spousal support payments
- Student loans
- Certain tax debt.
Given all that is at stake when creditors threaten wage garnishment, borrowers should consult with an experienced bankruptcy and debt relief attorney for help stopping garnishments and addressing their financial issues.
Denver Bankruptcy Lawyer at Lindquist-Kleissler & Company, LLC
If you have been threatened with wage garnishment or are facing a serious financial crisis, Denver Bankruptcy Lawyer Arthur Lindquist-Kleissler can help you figure out your best options for resolving your financial issues.
Since 1979, Mr. Lindquist-Kleissler and the other legal professionals at Lindquist-Kleissler & Company, LLC have been providing both individuals and businesses with the highest quality of legal services when it comes to debt relief and bankruptcy. From simple to complex bankruptcy cases, Mr. Lindquist-Kleissler can always be trusted to:
- Tailor his services to his clients’ specific needs and situations
- Explore non-traditional options for debt relief
- Maximize utilization of Colorado Bankruptcy Law and guide borrowers through the bankruptcy process (when filing for bankruptcy is the best option for borrowers)
- Help them achieve the best possible outcomes to their cases.
Let’s Talk about Your Debt Relief Options
For a free 30-minute consult, contact us by calling (303) 691-9774, or email us using the form on this page. You will pay nothing up front to obtain trusted, professional advice regarding your case and your options.
From our office in Denver, Arthur Lindquist-Kleissler represents clients throughout the Denver Metropolitan area and Colorado, including (but not limited to) Aurora and Arapahoe County.