How the Automatic Stay Protects You
The stay begins automatically when you file for bankruptcy. No additional steps are required. Under Chapter 7, the stay protects you until your debts are discharged. If the debt was included in the bankruptcy, the garnishment will not return. If the debt was not discharged, the garnishment will resume.
With Chapter 13 bankruptcy, the stay protects you for the duration of the repayment plan. This ranges from three to five years on average. During the automatic stay, certain non-dischargeable debts can be put on hold. This includes student loans. Please be aware that you may owe additional penalties and interest for nonpayment during the bankruptcy. The automatic stay will end when your case is closed, dismissed or discharged. In some instances, the stay can be lifted to allow garnishment, but it is not common.
Priority Debts and Exclusions
Garnishment will continue for priority debts. These include child support payments and alimony. This applies regardless of whether you are current on your payments or owe back support. The payments will continue to be withheld on a voluntary or involuntary basis.
Garnishments related to certain non-dischargeable debts will resume after the automatic stay ends. These debts include judgments related to criminal cases or fraud as well as back taxes owed to the IRS or the Oklahoma Tax Commission. Depending on the type of debt that you carry, the stay may not fully protect you from wage garnishment.
Enforcing the Automatic Stay
If funds were withheld from your paycheck immediately before your filing, it’s possible to have them returned if certain requirements are met. I will work with the bankruptcy court to make sure that the funds are returned when possible. Debt collectors and organizations that violate the stay by collecting debts or garnishing wages face large penalties. They may also be ordered to pay damages to you.
If you’re concerned about having your wages or assets garnished during a difficult time, call me at 405-216-0007. We can assess your situation during a free consultation to see if there is a way to protect your hard-earned wages. For more than 25 years, I have help Oklahoma residents navigate bankruptcy, stop wage garnishment and manage debt.