One problem that people face when they’re considering bankruptcy is a concern about wage garnishment. That’s why one of the reassuring aspects of Chapter 13 bankruptcy is the protection it offers in regard to being sued or having wages garnished. When you file the bankruptcy, an automatic stay is enforced. It stops all legal action against you — in effect acting like a preliminary injunction against the collection of a debt.
So, if you are facing a wage garnishment, that wage garnishment will stop as of the filing of the bankruptcy. What’s more, if there are debt collection activities in the works, those debt collection activities will stop. Debtors cannot foreclose and they cannot sue you. If they are in the process of suing you, they have to stop legal action.
These are the kinds of concerns that we often confront in our very first conversation with a client. It’s why we encourage people to contact us before taking any action. We explain that we work with them through a three-step process. The first step is the free initial consultation where I sit down with the client or couple and explain the difference between Chapter 7 and Chapter 13 options. I explain the differences and break down why I would recommend one over the other.