Stop Wage Garnishments Now (And Get Your Money Back)
If a debt collector sued you and obtained a judgment, then they may be entitled to garnish your wages. In Massachusetts, up to 15% of your gross income over $400 per week can be subject to wage garnishments. The loss of this income can be disastrous for many families.
However, wage garnishments must stop once a bankruptcy case is filed. There is an ‘automatic stay’ put into effect upon filing which prohibits this type of continued collection activity. If a creditor does not timely stop their garnishment, then you might be entitled to money damages.
Because of this, once a garnishment is put into effect, many people will file a bankruptcy petition under either Chapter 7 or Chapter 13. A bankruptcy would allow you to stop the garnishment and discharge the underlying debt. The timing of your bankruptcy filing, though, can be very important.
As strange as it sounds, in some cases it may be best for you to delay the date of filing for a short time in order to let the garnishment continue. Why? Because once the creditor has garnished a total of more than $600, you can be entitled to a return of all of your money.
The bankruptcy process is intended to treat all of your creditors equally, and therefore “preference payments” are prohibited. In other words, you can’t pay off one creditor just prior to filing, simply because you like them better. If any creditor receives more than $600 from you in the 90 days prior to filing, then they may have received a preference payment.
But preference payments can also be the result of involuntary collection efforts, like wage garnishments or bank account attachments. And in this circumstance, Section 522(h) of the Bankruptcy Code states that you can be entitled to a return of all of your money.
The timing of a bankruptcy filing can be important in many different scenarios, and any strategy related to recovering wage garnishments is certainly something that should be reviewed with your attorney prior to filing. Please contact us today for a free consultation to review your options.
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Culik Law is a Massachusetts Attorney / Law Firm. The posts on Culik Law’s blog are not intended as legal advice. If you have questions about your particular situation, CONTACT CULIK LAW for a Free Consultation.