Will Chapter 7 Bankruptcy Stop Garnishments in New York City?

One of the most frustrating things that can happen to a person behind on their bills already is wage garnishment from a creditor.  Having money taken directly from a checking account is often the last straw before people make an appointment with a bankruptcy attorney.  If a creditor gets a judgment against you, Chapter 7 bankruptcy can not only stop the wage garnishment but will also eliminate the debt entirely so you never have to deal with the headache of garnishment again.

There are a handful of limited exceptions for debts considered to be non-dischargeable, but for the most part Chapter 7 should put a permanent end to any wage garnishment from a creditor.  If your garnishments happen to include back child support or alimony payments, taxes, or student loans you may need to explore your Chapter 13 options as well in order to put an end to them.

Once you file Chapter 7 the law in New York City immediately begins protecting you by imposing the “automatic stay” on your creditors.  The stay will instantly cease any and all collection efforts against you including the wage garnishments.  The moment you file a Chapter 7 bankruptcy petition the garnishment will stop. What’s more is that the bankruptcy will also rid you of the debt you were being garnished for in the first place.  With a successful Chapter 7 discharge the debt will be eliminated entirely and forever.

Not every debtor will qualify for Chapter 7 automatically.  It depends on your specific debt trouble as well as how much money you make compared to the New York City median income levels.  If you can’t pass the bankruptcy means test you may need to consider other bankruptcy.  There are pros and cons to both Chapter 7 and Chapter 13, but Chapter 13 can stop garnishments too, and may actually provide more overall protection in the end.   Chapter 7 bankruptcy is not a free ride. There are some consequences to filing, but you should never delay seeking the advice you need.  For our clients that are having their wages garnished already the pros of bankruptcy nearly always outweigh the cons.

If you live in New York City and have questions about stopping a current or impending wage garnishment please contact the Law Offices of William Waldner online or at 212.244.2882 to arrange a free bankruptcy consultation today.  We only practice bankruptcy law and maintain a 99% Chapter 7 bankruptcy discharge record in New York City as of 8/31/16.

This article is intended for educational purposes only.  By reading no attorney-client relationship has been created.