There are different issues relating to wage garnishments and bankruptcy depending on the specific circumstances involving the wage garnishment.
Wage Garnishments that were obtained as an agreement directly with you as a result of the threat of civil litigation:
Sometimes creditors, debt collection agencies or even a law firm are so convincing while making threats of litigation and wage garnishments, the debt holder is compelled to agree to a form of wage garnishment rather than be sued. First of all, if you agreed to a wage garnishment plan, or what these companies may call a repayment plan, this agreement may not be legal or stand up in court. Especially if the agreement to wage garnishment or repayment plan was the result of threats by the creditor, debt collection agency, or law firm. Even though you are "paying off the debt", if you choose to file for bankruptcy, this wage garnishment will be stopped if the remaining debt is allowed by the court to be covered in a bankruptcy case.
Credit and debt collectors threatening wage garnishments without filing civil litigation against you:
If a creditor has obtained a successful lawsuit against you that resulted in court ordered wage garnishments to collect the judgment, this debt is discharged in a bankruptcy. The judgment lien may have other issues which will be discussed with you when you meet with your attorney. You should be sure to have all information relating to lawsuits and garnishments with you when you meet with the attorney.
When you file bankruptcy:
An automatic stay goes into effect that prohibits and stops most collection activities by creditors. This means that wage garnishments are also stopped as long as the bankruptcy stay is in effect. If a creditor wants to resume collection efforts, it must ask the court for permission to do so. The court will lift the stay only if the creditor has a valid reason for doing so. An unsecured creditor such as a credit card company simply wishing to resume a wage garnishment is not a valid reason for the court to lift the stay.
Debts which cannot be included for consideration to be discharged or sought to stop wage garnishments in a bankruptcy include:
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