Many people turn to bankruptcy due to garnishment or increased collection efforts. With respect to garnishment, if your wages are not currently being garnished, but you think that you will be subject to a garnishment, filing for bankruptcy will stop any efforts to garnish or collect. In a Chapter 7 Bankruptcy the debt will be completely discharged and the creditor will not ever be able to try to collect this debt or garnish your wages. In a Chapter 13, the wage garnishment will stop, but you may be required to pay back that creditor, depending on your plan and the nature of the debt. If your wages are currently being garnished the wage filing for bankruptcy will stop the wage garnishment. Once your case is actually filed with the court creditors are not permitted to continue garnish your wages. In some cases it may take a few pay periods to stop. You are entitled to a refund for any garnishment that occurs after you have filed for bankruptcy. As a practical matter, it may take some time to receive your refund.
With respect to collection efforts, creditors are not permitted to make any attempt to collect the debt after you have filed for bankruptcy. If your creditors continue to contact you after filing with the court you should inform your attorney who can then contact the creditor, or if the problem persists, make a formal complaint. Some attorneys will accept payment plans for fees, but may not file until you are paid in full. Creditors are not required to stop contacting you until after you actually file with the court. As a practical matter, once you have retained an attorney, you may tell your creditors that and provide your attorney’s information. At that point the creditor may choose to stop contacting you regarding the debt.
It is important to note, that if you choose to reaffirm any type of debt, generally a vehicle or a house, and you are not able to remain current on those payments your creditors may contact you, try to collect, garnish your wages, repossess property, or put a lien on your home. Reaffirming your debt basically means that you have choose to keep the property and the contract and you are obligated to pay in accordance with the terms of the original contract.
If you have any questions, or would like to schedule an appointment, contact a St. Louis Bankruptcy Attorney today!