So can bankruptcy really stop wage garnishments?
Bankruptcy stops wage garnishment the moment you file. This is because of something called the
What is this?
It is an order for creditors to stop collecting debts. This includes any wage garnishments.
How soon can I file?
Immediately if need be.
The typical practice is to file all of the forms at the same time; however, in an emergency (such as needing to immediately stop a foreclosure, eviction, or car repossession) it is permissible to file just the two-page Voluntary Petition, and file the other forms within fourteen days. Once you file the Voluntary Petition, you have turned over control of your property and debts to the court. You may not transfer any property or pay any debts without the approval of the court.
Keep in mind that improperly filed petitions are immediately rejected.
Too good to be true?
Well, its purpose is to preserve your property. This allows you to keep property that the law determines exempt from liquidation. It also prevents an aggressive bidding war from multiple creditors. Bankruptcy laws protect your rights as a sovereign individual. They prevent undue burdens such as slavery, debt bondage, death and/or debtor prison. America’s history of treating debtors is pretty unsettling.
What is the catch? (give it to me straight):
There is a potential to lose property, but all of this hinges on the court’s distinction between property that is deemed exempt and non exempt.
This is property that can be sold by the court and claimed by creditors.
This is a little harder to define. That is because the legal definition is simply the negative definition of non-exempt property. These are items that cannot be sold by the court and claimed by creditors.
A little frustrating right?
Well, this is intentional because context is the determining factor. The court gives you the opportunity to argue why your property should be exempt. The whole point of bankruptcy is to protect the debtor from undue burdens. This is why you need a courtroom and skilled attorneys to advocate on your behalf.
If you want more information on the difference between these two and the various nuances, this article breaks it down well.
The second consequence is that the bankruptcy information will remain on your credit report for seven to ten years after the filing date. Should you get into debt again, you won’t be able to file for bankruptcy under this chapter for eight years.
Consulting with an attorney helps you consider these implications thoughtfully when exploring bankruptcy as an option.
So what happens after filing and automatic stay?
Within two weeks you will attend something called a
This is where you will answer questions about the paperwork you filed. The court appoints a trustee to oversee the meeting. This is someone whose responsibility is to assure that the creditors are paid as much as possible. It is here that you will be asked to give a defense to your claim of bankruptcy. You will be required to explain why you are unable to pay the debt and why your property should be exempt.
Framing your defense well in your filing and creditors meeting is of course instrumental to your success.
creditors have a 60 day period to object to the discharge of debt after the meeting. They do this by filing an adversary proceeding. Fraud and or preferential treatment of creditors can trigger an adversary proceeding.
So why Jumpstart Bankruptcy?
We offer transparency and results. We don’t charge hidden fees and we empathize with our clients by taking the time to educate you on all options. Our testimonials demonstrate how we can successfully frame your defense in a way that preserves your property and discharges your debt.
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