Bankruptcy Can Stop Garnishment
When a creditor files a lawsuit and obtains a judgment against a debtor, one of the remedies available for them to collect on their judgment is to garnish the wages or bank accounts of the judgment debtor. Garnishments can be one of the most stressful events in a debt collection scenario as the amount taken from a paycheck can vary dramatically based on your household or can freeze you out of your bank account entirely. Most individuals and families live paycheck to paycheck and a reduction in wages or the loss of savings in bank accounts can cause severe negative financial problems.
Fortunately, filing a Chapter 7 bankruptcy will immediately stop a garnishment or filing a Chapter 13 bankruptcy will immediately stop garnishment in Springfield Missouri. The second your case is filed an automatic stay is imposed on the creditor and they will not be able to garnish you after your bankruptcy filing.
It is important when you get served notice of a garnishment to be familiar with what rights you have in the State of Missouri as a judgment debtor. A creditor is required by Missouri law to provide you with a disclosure accompanying the notice of garnishment that certain exemptions may be used to offset or completely bar an attempt to collect a judgment by garnishment.
An exempt asset is an asset that may not be seized or taken by a creditor. For example, if the debtor being garnished is the head of a household (supports a spouse or a dependent) then a creditor may not garnish more than 10% of that debtor’s wages.
Missouri as well as federal law do not allow income received from Social Security or Veteran’s benefits to be garnished by a creditor at all. While these types of situations may have valid protections against garnishments, it is important for a debtor to understand that the debtor is responsible for claiming assets or funds as exempt and you must do so with the court from which the garnishment was issued. You should carefully read all garnishment notices you receive to understand what deadlines apply to your case.
One alternative that can end a garnishment entirely is the filing of a bankruptcy. The bankruptcy code prohibits a creditor from attempting to collect on a debt in any fashion upon the filing of your case, including garnishments.
In fact, bankruptcy protections are so strong that they can stop garnishments on debts that may not even be dischargeable in the bankruptcy such as a student loan. Anyone suffering from the often-painful experience of a garnishment should discuss their situation with a qualified bankruptcy attorney.
The bankruptcy case must be filed to stop the garnishment. Just hiring an attorney does not stop the garnishment. The Licata Bankruptcy Firm helps our clients put an immediate stop to garnishments by meeting with you in person to file your bankruptcy case. Our in-person filing allows us to have your case ready to file with the Court after our filing appointment to immediately stop a creditor from garnishing you.