If you are facing pressure from creditors, you may wonder whether bankruptcy will stop wage garnishment by creditors in Oregon. Debt collection techniques such as wage garnishment can place a huge amount of stress on debtors who are already struggling to get by. Filing for bankruptcy can give you the opportunity you need for a fresh start.
What Is Wage Garnishment?
Wage garnishment happens when a creditor seeks repayment of a debt by obtaining a court order requiring your employer to withhold money from your paycheck. While this practice may sound unfair or unreasonable, it is one of several perfectly legal methods that creditors can use to collect overdue debts. But it often has negative consequences for debtors, who may receive unwanted attention from their employers due to the garnishment orders, and who are already having financial difficulties.
If a creditor has obtained a garnishment order against you, you should know that the law “protects employees from being discharged by their employers because their wages have been garnished for any one debt”. It’s illegal for your employer to terminate you because of a wage garnishment. Moreover, the law also limits the amount of wages that can be garnished in a week.
Filing for Bankruptcy Stops Wage Garnishment
When you’re facing wage garnishment, you’re also probably evaluating your financial options. Serious debts may lead you to file for bankruptcy so that you can get a fresh start. You’ll be happy to learn that once you file for bankruptcy, your creditor has to stop garnishing your wages. The bankruptcy court issues an automatic stay, meaning all creditors must halt collection efforts immediately. The stay provides breathing room and time to either have many of your debts discharged (Chapter 7 bankruptcy) or to get on a payment plan (Chapter 13 bankruptcy).
In Chapter 7 bankruptcy, the court assesses your debts and discharges the ones that qualify under the law. Most people qualify for several exemptions that allow them to keep their personal property during this process. If the court discharges the debt subject to the wage garnishment order, then the creditor will not be able to garnish your wages after your bankruptcy stay ends.
In Chapter 13 bankruptcy, the court sets up a payment plan by which you make a lump-sum monthly payment toward all your debts. At the end of the payment plan, debts that are not paid off and are dischargeable will be discharged by the court. As a result, you may partially or fully pay back the debt subject to the garnishment order during this process. If you don’t pay it back in full, it may be discharged.
Frequently Asked Questions
A creditor seized money from my bank account. Is that considered wage garnishment?
A creditor seizing money from a bank account, using what’s called a bank levy, is very similar to wage garnishment. The creditor must obtain a court order requiring the levy, which mandates that the bank release the funds to the creditor. If your bank account has been levied, we’re available to discuss your financial options including bankruptcy.
Debt collection agencies are pestering me about a few old debts I didn’t pay back. Is this legal?
There are strict rules for the communications that creditors can make to debtors. If you’re receiving aggressive, rude, harassing, or misleading communications, you may have legal recourse under the Fair Debt Collection Practices Act. Moreover, now may be a great time to take action to resolve your debts before your wages are garnished or your bank account is levied. Our firm would be happy to speak with you about these issues.
I can’t pay my bills this month, and I’m worried about my financial future. Can you help?
Please give us a call to schedule a free consultation about your options. Filing for bankruptcy is a useful tool for many people who can’t pay their bills and need a fresh start. We’ll discuss your legal rights during the consultation so that you know what to expect. Reaching out for help is a great first step towards solving your financial problems!
Reach Out to a Chapter 13 Bankruptcy Attorney to Learn More
Interested in starting fresh by filing for Chapter 13 bankruptcy? Contact our firm for legal advice about Chapter 13, other kinds of bankruptcy, and non-bankruptcy debt relief options. We offer free and confidential consultations in Beaverton, Oregon. Talk with a Chapter 13 bankruptcy attorney at the Law Offices of Alexzander C.J. Adams, P.C. by calling us at 503-278-5400 or toll-free at 888-560-8146, or completing our online contact form. We look forward to hearing from you!
