How Bankruptcy’s Automatic Stay Can Stop Garnishments

When you file for bankruptcy (under any chapter, including Chapter 7), an immediate legal protection goes into effect. It’s called the “automatic stay,” and it acts like a shield, protecting you from most creditors. Here’s how it works:

• As soon as you file, most garnishments must stop. This applies to most creditors, including credit card companies, medical providers and debt collectors.
• This protection covers your earnings, bank accounts and, in many cases, even your tax refunds.
• Creditors can no longer contact you with phone calls or letters demanding payment.
• If a creditor attempts to garnish your wages after you’ve filed, they could face sanctions from the court.

The automatic stay gives you breathing room while your bankruptcy case is processed by the court. It’s like pressing pause on the financial stress you’ve been dealing with.

Do you need court approval for an automatic stay?

The automatic stay goes into effect immediately upon filing the bankruptcy petition with the court. It does not require any further approval. This means that, in most cases, creditors must immediately stop collection efforts, including wage garnishments, as soon as you file. This protection applies even before the bankruptcy court formally approves your bankruptcy filing.

However, it’s important to understand that the automatic stay is not absolute. Some debts, such as recent taxes and child support, may still need to be paid.

Finding relief from garnishments

For many people struggling with overwhelming debt from credit cards, medical bills and other unsecured debts, bankruptcy (including Chapter 7) can be a lifeline to financial freedom and a world without garnishments looming over their heads.

If you’re feeling stuck and worried about garnishments, don’t lose hope. Consider consulting with a bankruptcy attorney experienced in Chapter 7 to explore your options and take the first steps toward a garnishment-free future.