Garnishment and Bankruptcy
I retained an attorney to file a bankruptcy but my garnishment has not stopped
Often time clients come in and retain our services and hope that the garnishment stops then. Unfortunately that is not the case. Garnishments stop when the automatic stay of the bankruptcy is in effect which happens upon the bankruptcy being filed. Retaining an attorney and being in a bankruptcy are two different steps in the process.
We offer a free consultation for bankruptcy. You can come in and meet with one of our attorneys at no cost. After the consultation, if you determine that bankruptcy is your best option, then you can retain our attorneys by putting down a minimum payment and signing a contract. Retaining our firm does not mean you are in a bankruptcy. It means you have retained an attorney to file a bankruptcy. By informing creditors of this information, some may stop calling you however collection efforts are not required to stop until you are actually in a bankruptcy.
There is an automatic stay that stops your creditors from collecting from you while you are in the bankruptcy. This automatic stay does not take effect until you are in an active bankruptcy. That means fees are paid, paperwork is filled out, petition is reviewed and sign and then filed with the court. The paperwork includes listing all of your assets, creditors, income and expenses as well as providing taxes and paycheck stubs. As soon as it is file, the automatic stay takes effect. That is not the end however.
The garnishment does not stop the second we file. Many things have to happen before the garnishment is stopped. First, you file bankruptcy (making sure you list the creditor that is garnishing as well as the attorney for that creditor so that they can receive notice). After filing, have your attorney contact the creditor’s attorney and give them notice of the bankruptcy and request a release of garnishment. The creditor’s attorney then has to process this request and then send notice of the release of garnishment to both your attorney and to your employment to stop the garnishment. Once your payroll department receives the garnishment they release the garnishment and stop deducting from your paychecks.
To avoid all of the above, file the bankruptcy because you even receive a garnishment, a judgment or a summons. If you are in debt and cannot afford to pay your way out of debt, consult a bankruptcy attorney.